Mainland Company Listings to Make Up 98% of Money Raised in Hong Kong This Year

What’s new: About 98% of the total HK$397.3 billion ($51.2 billion) raised from IPOs and secondary listings on the Hong Kong Stock Exchange this year is expected to come from Chinese mainland companies, up from 74% in 2019, according to a report that Deloitte China released on Wednesday.

In total, Hong Kong will probably see 145 new listings in 2020, with mainland companies making up 74%, again, an increase from the previous year when they made 60%, Deloitte estimated. With less than two weeks in 2020 to go, the five largest listings in the city this year are all expected to be made by mainland businesses, collectively raising HK$123 billion.

What’s the background: The total proceeds from new listings in Hong Kong should place the local exchange second in global rankings in 2020, and its growth is expected to continue in 2021, the report said.

“Hong Kong has the ecosystem and excellent conditions to strive to raise a record amount of IPO funds in 2021. Its listing environment has become increasingly conducive to fundraising by new economy companies,” Dick Kay, leader of Deloitte China National Public Offering Group, said in a press release accompanying the report.

Like a recent report from KPMG International Ltd., the Deloitte report also estimated that three of the world’s top five stock exchanges that generate the most proceeds this year will be based in China.

What else you may want to know: While the number of and importance of mainland companies listing in Hong Kong has grown, only 14 new listings were made by foreign companies — those from Malaysia, Singapore and the U.S. — this year, raising about HK$3 billion, Deloitte said, way down from HK$48.4 billion in 2019.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

Support quality journalism in China. Subscribe to Caixin Global starting at $0.99.