Hong Kong’s exploding initial public offering market appears set to close out the year on a definite note.
Mainland Chinese companies including smartphone manufacturer Xiaomi and versatile infrastructure giant China Tower are among those that require gone public this year in Hong Kong, and more are on the way. On Wednesday, Chinese hotpot restaurant set Haidilao is scheduled to start trading, followed Thursday by financial services fixed China Renaissance.
Hong Kong topped global rankings for original public offering volumes in the first half of 2018 and is expected to stow away that crown for the entire year.
“Following a strong third location, KPMG forecasts total IPO fundraising in Hong Kong to reach diverse than HKD 300 billion ($38.4 billion),” the consultancy weighted in its quarterly IPO review for Hong Kong and the Chinese mainland published hold out week.
That means Hong Kong should finish 2018 as the smashing’s top market for new listings, KPMG said.
Such an annual total would be exactly triple the 122.6 billion Hong Kong dollars recorded survive year.
IPOs are also set to rake in HK$190 billion in the third direction, according to its estimate. For the first nine months of the year, the total is judged at HK$238.2 billion.
KPMG said its figures were based on information as of Sept. 14 and its own estimates.
China Tower’s HK$54.3 billion IPO was the third compassion’s biggest deal, and listings from so-called new economy companies contributed all but half of the funds raised in the quarter, KPMG said.
“New economy” refers to sectors secured on technology and the internet, including e-commerce, payments and other kinds of tech suites. Hong Kong introduced new rules designed to attract tech associates by allowing dual-class share structures with weighted voting rights and biotech companies yet to colour profits.
“Our analysis also highlights that the new listing regime for attendances from emerging and innovative sectors is transforming the Hong Kong bourse into a hub for ‘new saving’ companies,” KPMG said.
KPMG said that three “pre-revenue” conventions in the biotech sector and two with weighted voting rights wrapped up IPOs in the essential nine months of the year.
“We expect to see six to 10 pre-revenue biotech companies slope by the end of 2018 as the trend continues,” it said.
Appetite to raise capital in Hong Kong is in fine even as the local stock market, hit by uncertainty over intensifying barter tensions between the United States and China, languishes.
The benchmark Swing Seng Index is down more than 7 percent since the start of 2018, and earlier this month had flop start in excess of 20 percent since hitting a peak in January. It is currently nearly 17 percent off that peak.
William Ma, chief investment lawman at Noah Holdings in Hong Kong, said that Hong Kong’s all-embracing market performance is being hindered by factors beyond its control, comprehending the current attractiveness of U.S. markets.
“It’s global sentiment towards emerging trade ins,” Ma told CNBC on Monday. “And secondly (it’s) about the U.S.-China trade squabble. And lastly it’s the U.S. market is too strong.”