Year of the Ox reflections: Will Hong Kong regain the top 3 slot for global IPOs?

Last year, AsianInvestor made 10 predictions - ranging from inflation surprises to cryptocurrencies - about how markets would play out in the Year of the Ox. As we enter the Year of the Tiger, we examine how accurate those predictions were:

Will HK and Shanghai’s bourses break fund-raising records?

Answer: Yes

Verdict: Wrong

The shrinking fund-raising size in Hong Kong and Shanghai reflected investor concerns over Chinese stocks, testing market demand and confidence after the events of Ant Group and Evergrande.

In the third quarter of 2021, IPOs in Hong Kong raised more than $35 billion, up 28% compared with the same period last year, according to a KPMG report. Even so, NASDAQ and New York bourses fundraisings by comparison jumped 97% to about $115.8 billion.

There were 99 new IPOs in 2021, of which 98 were listed on the Main Board. 

Total funds raised by IPOs in 2021 reached HK$331.66 billion, marking a decrease of 17% from the previous year, despite the high level of activity from New Economy listings and secondary listings by US-listed Chinese enterprises, according to the latest report published by PwC. 

These disappointing results are unlikely to see a repeat this year. Chinese companies' coming back to home markets including Hong Kong, Shanghai and Shenzhen bourses, could break the fund raising record.

Although there are still many global political and economic uncertainties, Hong Kong is expected to see an increase in total fundraising of between HK$350 and HK$400 billion in 2022, driven by abundant funds and huge investment needs for corporate development, the report says.

In 2021, US-listed Chinese enterprises returned to Hong Kong for listing raised a total of HK$100.3 billion. Biotech listings in Hong Kong surged in 2021, making it the largest such listing platform in Asia.