Outlook for the HK IPO market
Updated: 2013-09-20 15:29
(HK Edition)
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If Alibaba halts its listing plan in Hong Kong, the city may lose the biggest IPO business since pan-Asian insurance group American International Assurance's (AIA) $20 billion listing in October 2010. Looking ahead, Hong Kong-based financial analysts are worried about the overall IPO market performance locally, this year.
"Alibaba's decision will affect the city's IPO market performance in 2013, as the IPO deals in number and volume surely will decline in 2013 compared to 2012, if there is no Alibaba listing," First Shanghai Securities Chief Strategist Linus Yip tells China Daily.
"I am not optimistic about the Hong Kong IPO market because fewer business conglomerates have listed and will seek listings in the local IPO market," Kingston Securities Director Dickie Wong tells China Daily.
"I predict the Hong Kong IPO market cannot maintain its top-three standing in 2013, because fewer business conglomerates are likely to be listed in the city this year."
According to HKEx data, the number of new listings in the first eight months of 2013 slumped 24.5 percent to 37, with the level of investment, at HK$44.9 billion, flat over the past year.
After wearing the crown as the global IPO center par excellence for several years, the city had $7.72 billion (HK$59.83 billion) worth of deals in 2012, the lowest since the 2008 global financial meltdown, according to Reuters data.
Despite the current lackluster status of the city's IPO market, Yip envisions a possible market rebound by the end of this year.
"With the gradual recovery of the mainland and the US economies, the local IPO market is poised to recover. We especially anticipate more IPO activities related to the Internet, and information technology companies will emerge if Alibaba's listing finally gets through," Yip says.
Accounting advisory firm PricewaterhouseCoopers (PwC) expects an estimated 70 to 80 IPOs with total fundraising of between HK$120 billion and HK$150 billion in 2013, which will help Hong Kong regain its third position for global fundraising. Financial services, retail, consumer goods and services, property-related, technology, pharmaceutical and energy and mining are expected to top the industry listings.
"There are still ample funds in the market, and the IPO pipeline remains strong, as many companies are preparing their IPO filings. The fundraising market is likely to gradually improve when market sentiment is expected to revive markedly in the third or fourth quarter, which will create a more favorable environment for medium- to mega-sized IPOs," said Edmond Chan, PwC Hong Kong Capital Market Services Group Partner.
(HK Edition 09/20/2013 page1)