IPO deals take HK to the top

Business | 26 Mar 2020 5:32 pm

Hong Kong ranked top of the global initial public offering market by deal numbers in the first quarter despite the global impact of the coronavirus pandemic  on the capital market, according to EY.

In Hong Kong, first-quarter IPO activity on the stock exchange saw a 6 percent rise in deal numbers compared with the first quarter of 2019, while proceeds declined by 32 percent.

There was no IPO from Chinese companies on the bourse in February, EY said.

Some candidates have chosen to postpone their  plans while those unaffected by the volatility will continue to prepare for IPO launch this year, using webcasts for roadshows and adapting pre-launch activities to reflect the current environment.

In the meantime, the bourse has issued a consultation paper on corporate weighted voting rights beneficiaries.

Ringo Choi, EY Asia-Pacific IPO leader, said: “If this policy is approved and implemented, we expect some mega IPOs with a corporate WVR structure will come to the market in the second half of 2020. 

"Additionally, the valuation of the HKEX remains relatively low compared to the other major markets. This may drive an increase in investor demand, which would bode well for IPO activity in Hong Kong.”

 

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