Hong Kong Exchanges and Clearing Ltd. (00388.HK) may only rank fifth in the world in terms of funds raised from initial public offerings this year, as companies either postpone their listings or seek other venues to raise capital, the Hong Kong Economic Journal reported on Monday.
The newspaper made this forecast after sources said three mainland commercial lenders — China Guangfa Bank Co. Ltd., Bank of Beijing Co. Ltd. (601169.CN) and Bank of Shanghai Co. Ltd. — are shelving their plans to list in Hong Kong as their restructuring exercises drag on.
Earlier, HKEx lost Alibaba Group Holding Ltd. to the New York Stock Exchange after Hong Kong regulators rejected the e-commerce giant’s proposal to have dual class shares. This means HKEx can no longer hope to make it to the top three IPO venues, giving the slots to, in descending order, the NYSE, London Stock Exchange and NASDAQ Stock Market, the report said.
In the first six months of 2014, Hong Kong raised HK$81.3 billion from 48 IPO deals, up 105 percent and 118 percent, respectively, from the HK$39.7 billion raised out of 22 IPOs a year earlier, according to data released earlier by Deloitte.
Analysts said poor sentiment and low valuations of banking counters may also have to be blamed for Hong Kong’s lackluster performance.
Companies seeking to list in Hong Kong are forced to reduce their IPO size or cut their valuation because of dim investor sentiment, the report said.
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