Hong Kong IPO market’s ‘very positive momentum’ set to build, HKEX CEO says The momentum in Hong Kong’s initial public offering (IPO) market is set to continue building as positive signals indicate more mega deals on the horizon, according to bourse operator chief Bonnie Chan Yiting. “I do expect the activity and this very positive momentum to carry on given that we’re seeing a lot of very good signs in the IPO market,” Chan, the CEO of Hong Kong Exchanges and Clearing (HKEX), said after the trading debut of Midea Group on Tuesday. The world’s largest maker of home appliances raised HK$31.01 billion (US$3.98 billion) in the city’s largest IPO in more than three years. With strong investor interest, Midea may exercise an overallotment option that would expand the deal size to US$4.6 billion, making it the world’s second-largest fundraising exercise this year. More mega deals could come to fruition in Hong Kong, as mainland Chinese authorities continue to encourage leading Chinese enterprises to list in the city, Chan said. “We have a perfect example today in the form of this very symbolic IPO of Midea Group,” she said. The IPO vaulted Hong Kong into the top five listing venues globally, according to fundraising amount, Chan said. The city had dropped to 13th on that ranking in the first half of the year, a letdown from its status as the world’s top IPO destination in seven of the past 15 years. Hong Kong has raised around HK$51 billion across 45 IPOs this year, according to an estimate by KPMG. In April, the China Securities Regulatory Commission unveiled five measures to support Hong Kong’s capital markets. Chan said that during a recent visit to the mainland, authorities were consistent in their support for Hong Kong’s status as an international financial centre. In addition to IPO activity, the city’s secondary fundraising market is on the rise, with more than US$20 billion in follow-on fundraising being completed so far this year, according to Chan. Upbeat investor sentiment has also been evident in the recent inclusion of Alibaba Group Holding’s shares in the city’s cross-border Stock Connect programme. “Both the stock price and the volume of that stock have picked up significantly,” Chan said. “When we looked into it, we saw not only southbound money flowing in from mainland investors, but also a pickup in terms of activity and investments from international investors.” HKEX has received more than 100 new listing applications this year and there is no shortage of applicants who plan to raise US$1 billion, Chan said. If the external environment permits, the world’s fourth-largest stock market hopes to see these companies complete the listing work by the end of this year, she added. Chinese logistics giant SF Holding, for example, is preparing for an IPO in Hong Kong that could raise US$1 billion to US$2 billion. Industry estimates show that about five IPOs in the pipeline could be above HK$5 billion, but there is no guarantee that they will hit the market this year. The stock market will also benefit if an expected interest-rate cut by the US Federal Reserve this week comes to pass, Chan said. Some industry experts are still only cautiously optimistic, even as they acknowledge that positive developments such as falling interest rates and the introduction of Chapter 18C, which makes it easier for specialist tech companies to list, will stimulate Hong Kong’s IPO market. “It may be too early to tell that the IPO market is fully back on track based on a single mega-sized IPO contributing the data,” said Louis Lau, partner of capital markets at KPMG China. “We need to observe for a longer period to see if there is a steady deal flow from different sectors and deal sizes.” Separately, HKEX is on track to allow trading to continue during typhoons and torrential rain starting from September 23. The bourse operator has been working with the industry participants and is ready to implement the new rule. https://www.scmp.com/business/banking-finance/article/3278842/hong-kong-ipo-markets-very-positive-momentum-set-build-hkex-ceo-says (ICE HONG KONG)

Fonte notizia: South China Morning Post