Shanghai poised to pip HK in stock sales rankingBusiness | 2 Jul 2020 5:48 pm
Shanghai is expected to replace Hong Kong as the world's biggest initial public offering market in 2020 by total fundraising amount, thanks to the launch of the Science and Technology Innovation Board, says PwC.
The firm projects Hong Kong to raise between HK$230 billion and HK$260 billion in 2020, with four to six secondary listings in the second half, helping it secure a top-three place. PwC predicts 180 Hong Kong IPOs, including 165 on the main board, while three to five companies would raise more than HK$10 billion in the second half, says Benson Wong, PwC Hong Kong entrepreneur group leader.
Biotech and other new economy company IPOs will be more active, he says.
PwC estimates there will be more than 10 biotech company listings this year.
PwC expects continued vigorous growth in the mainland markets, with 300 new listings and total funds raised over 300 billion yuan for 2020.
Shanghai's STAR Market has improved the diversification of China's capital market by providing an alternative listing choice for Chinese technology and innovation enterprises with different listing needs. The accelerated reform of the Shenzhen ChiNext registration system will help innovative SMEs go public and will be conducive to the healthy development of China's capital market, it says.
But Hong Kong remains competitive, favored by companies which hope to raise Hong Kong dollars from international investors, Wong says, adding the local market could give valuations similar to the US market and the listing reform in 2018 also attract more technology and biotech firms to list.
Wong says PwC is working on more than 300 IPO deals, and half of the clients have chosen Hong Kong, higher than it was last year.