Funds raised from initial public offerings (IPOs) in Hong Kong are likely to remain over HK$200 billion (US$25.8 billion) next year, compared with an estimated HK$225 billion this year, KPMG says.
The accounting giant forecasts there will be about 110 candidates for listing in Hong Kong in 2015, with big deals from the financial services industry, such as, potentially, Guangdong Development Bank, Shanghai Bank and some insurers.
Deals are also expected in the pharmaceutical and environmental sectors.
This year, KPMG estimates a total of 109 companies will list on the Hong Kong stock exchange, the highest number in a decade, compared with 97 companies last year.
Combined IPO proceeds are expected to rise 33 percent from HK$169 billion last year.
The proportion of large IPOs, which raise more than HK$5 billion, has increased to 11 percent from 8 percent last year. The proportion of small IPOs, those raising less than HK$1 billion, also rose 3 percentage points, to 57 percent.
KPMG said the proceeds from several big IPOs this month may reach HK$84 billion.
“We expect market sentiment will remain positive and IPO activity to stay buoyant, underpinned by a strong pipeline,” Rebecca Chan, a partner and head of the Hong Kong capital markets group at KPMG China, said in a media briefing Wednesday.
Hong Kong is likely to secure second place worldwide in IPO funds raised this year, after the New York Stock Exchange, which, by the end of last month, had raised funds of HK$515 billion.
Louis Lau, a partner in KPMG China’s Hong Kong capital markets group, expects Shanghai-Hong Kong Stock Connect to reinforce Hong Kong’s position as a gateway to investment in the mainland.
Lau said the integration of the stock markets on both sides of the border could eventually create one of the world’s largest and most active equity markets.
A challenge for Hong Kong is whether it should permit shareholder structures other than the “one share, one vote” structure, which has been the only kind allowed since 1989.
Chan said it’s a good time to review existing rules and practices, and the exchange is moving in the right direction by allowing investors and market participants to express their views.
She said that against the backdrop of China’s continued efforts to support the economy through stimulus measures and the recovery in the United States, IPO activity in Hong Kong will remain strong next year.
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