Shanghai May Beat Hong Kong in IPO Fundraising

Hong Kong slid to third place by amount of money raised through initial public offering (IPO), due to a lack of mega listings so far this year.

In the first three quarters of this year, 106 companies raised HK$85 billion ($10.89 billion) on the Hong Kong stock exchange, down 37% year-on-year, according to a report from Deloitte China released on Thursday.

In comparison, 44 companies raised HK$143 billion on the New York Stock Exchange and 173 companies raised HK$120.3 billion on the Shanghai Stock Exchange (SSE) during the first three quarters. The Shenzhen and London stock exchanges ranked fourth and fifth by IPO value, according to the report

The Stock Exchange of Hong Kong (SEHK) had ranked first for the last two years by amount of money raised through IPOs. Last year, its largest listing was the Postal Savings Bank of China, which raised HK$57.6 billion during the third quarter. SEHK’s largest listing so far this year has been Guotai Junan Securities, which raised HK$17.2 billion, ZhongAn Online P&C Insurance with HK$11.3 billion, and Zhongyuan Bank, which raised HK$9.3 billion.

Deloitte predicts the SSE will surpass the SEHK by IPO value this year, the first time in the history of the two exchanges. The SEHK is slated to complete several dozens more listing in the fourth quarter to bring its yearly total to HK$130-150 billion, while the SSE will likely raise HK$150-170 billion before year end, according to Deloitte.

The listing of China Tower Corp., a telecommunications infrastructure firm, could tip the balance, said Edward Au, partner and co-leader of the national public offering group at Deloitte China. If the joint venture company lists before year end, SEHK has a chance to surpass the SSE and finish in second place, Au said.

The SEHK ranked first by IPO value for five of the last eight years, according to data from the exchange.

Contact reporter Liu Xiao (liuxiao@caixin.com)