Hong Kong is expected to retain its position as one of the world’s top three centers for initial public offerings (IPOs) in 2020, helping issuers raise as much as HK$260 billion ($33.4 billion), according to a new report by accounting firm PwC.
The report, which was published Thursday, based the forecast on Hong Kong’s far-reaching 2018 overhaul of its listing rules, which it said could help diversify the capital market and lay an important foundation for the city’s IPO market.
Hong Kong brought into effect a new listing regime in April 2018. The new rules enabled firms that were not previously eligible to be listed to file for IPOs. Such firms included biotech companies that did not meet any of the financial eligibility tests of the main board, high-growth firms with weighted voting-right structures, and issuers seeking secondary listings to apply for an IPO on the Hong Kong Stock Exchange (HKEx).
In 2019, HKEx’s main board raised HK$314.5 billion through 169 IPOs, the highest amount of any global IPO market. GEM, its smaller secondary board, raised HK$1 billion, PwC said in the report.
The accounting firm also considered Alibaba’s secondary listing in Hong Kong late last year as a template for big companies at home and abroad with plans to launch IPOs in Hong Kong.
“Hong Kong’s IPO market is likely to remain active in 2020, with more ‘new economy’ firms choosing to list in Hong Kong thanks to the new listing rules,” the report said.
Contact reporter Ding Yi (firstname.lastname@example.org)