Date
13 December 2017
Mainland firms will resume initial public offerings in Hong Kong once the Occupy protests end, says CPA Australia's Ronald Yam (inset). Photo: HKEJ
Mainland firms will resume initial public offerings in Hong Kong once the Occupy protests end, says CPA Australia's Ronald Yam (inset). Photo: HKEJ

HK remains first choice for IPOs for China firms: CPA Australia

Hong Kong remains the first choice for mainland China firms that seek to go public, although the last two months have seen many companies put off their listing plans due to the Occupy protests, according to professional accounting body CPA Australia.

“Many mainland companies have temporarily suspended their listing plans in Hong Kong due to the protests over the last two months,” Ronald Yam, divisional president for Greater China region at CPA Australia, said in a Hong Kong media briefing on Tuesday. 

“Fortunately, they are not going to other places as they always treat Hong Kong as their first choice for their public listing plans,” Yam said. “When the Occupy protests end, mainland companies will return soon and raise funds in Hong Kong.”

In a survey conducted by CPA Australia last month on 250 of its Hong Kong members, about 46 percent said Hong Kong is losing its position as a leading IPO center while 43 percent took the opposite view. 

About 65 percent of the respondents said “political sentiment” could affect Hong Kong’s status as a leading IPO center while 34 percent said “investor sentiment” matters.

Despite the concerns, over half of the respondents (57 percent) expect 80 to 120 new listings in Hong Kong next year, roughly in line with the number of IPOs seen in 2013 and 2014. 

Responding to other questions, about 36 percent of the respondents said they are considering moving away from Hong Kong, compared with 29 percent a year earlier. 

About 29 percent cited “less confidence in Hong Kong’s future” as the reason why they are considering moving out of Hong Kong. That was followed by high property prices (19 percent), deteriorating living environment (15 percent) and work-life imbalance (14 percent). 

“There is no evidence showing that the Occupy protests have reduced people’s confidence in Hong Kong’s future,” Yam said, adding that the latest findings are roughly in line with those in the previous survey last year.

As was seen in the past, when the city’s economy bounced back from the SARS crisis in 2003 and global financial crisis of 2008, Hong Kong may see strong growth in gross domestic product next year following the recent political turmoil, Yam said. 

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RC

Chief reporter at EJ Insight

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