Initial public offerings (IPOs), including both original IPOs and secondary listings, on the Hong Kong Stock Exchange (HKEX), including the mainboard and GEM, have raised a total of $7.2 billion as of September 27, up 116.6% in proceeds compared to last year, as the number of IPOs increased 4.7%.
The figures are according to preliminary data from the deals intelligence team of the London Stock Exchange Group’s (LSEG).
Equity capital markets (ECM) in Hong Kong raised $17.8 billion, just before the first nine months of 2024 approached to a close. This is a 29.5% increase in proceeds compared to the first nine months of 2023; the number of ECM issuances also grew 8.8% from a year ago.
Hong Kong witnessed a slow start in 2024, however, ECM activity picked up in the second quarter raising $5.6 billion, seeing more than a four-fold sequential increase in proceeds compared to the first quarter of 2024, as number of ECM deals also grew 26% from Q1 2024.
During Q3, total ECM proceeds reached $10.96 billion, up 96% from the second quarter of 2024 and jumped almost 342% compared to the third quarter of 2023.
Earlier this month, China’s Midea Group priced its $4.6 billion secondary listing in Hong Kong. It was the largest ECM deal in Hong Kong so far this year and the largest new listing since Kuaishou Technology’s $6.2 billion Hong Kong IPO in 2021. Sichuan Baicha Baidao Industrial’s $330.2 million IPO is currently the largest ‘original’ IPO in Hong Kong so far this year.
Meanwhile, Chinese kitchenware maker and high quality cookware firm Carote is expected to list on Wednesday, October 2 with the deal reportedly heavily oversubscribed.
IPOs from Chinese companies captured 96% market share in terms of proceeds, with a total of $6.9 billion, while the remaining firms listing were from the US, Hong Kong and Singapore-domiciled issuers.
The HKEX is in fifth place on the global IPO stock exchange rankings so far this year in terms of proceeds from IPOs, including secondary listings US exchanges currently top the IPO venue globally by proceeds with Nasdaq taking the lead, accounting for 19.2% market share followed by New York Stock Exchange with 17.3% market share.
Meanwhile, IPO listings in Nasdaq have raised $14.6 billion over the same period, up 37.2% in proceeds compared to the first nine months of 2023. New York raised $13.1 billion, up 68.2% from a year ago. India’s National Stock Echange (NSE) and Bombay Stock Exchange followed with 11.2% and 10.4% market share, respectively.
Total global IPO proceeds including secondary listings, have raised $76.1 billion, down 21.9% compared to the first nine months of 2023, making it the lowest first nine-month total since 2009, which was $51.7 billion. Issuers from the US, China and India accounted for 29.9%, 16.7%, and 12% market share, respectively. Original IPOs globally raised $69.4 billion, down 25% from a year ago.
Follow-on offerings in Hong Kong have raised $4.5 billion so far this year, down 50.8% in total proceeds when compared to the first nine months of 2023. The number of follow-on offerings saw at least 161 deals so far this year, up 12.6% follow-on offerings were done in smaller sizes.
Financials accounted for 31.8% market share of the Hong Kong ECM proceeds worth $5.7 billion, a five-fold increase in proceeds compared to last year. Industrials captured 29.7% market share worth $5.3 billion, a significant increase from the first nine months of 2023. Materials rounded out the top three with 15% market share.
Based on preliminary data, Morgan Stanley currently leads the ranking so far this year for Hong Kong-listed ECM underwriting, capturing 18.1% market share with $3.2 billion in related proceeds, the LSEG said.
The Hang Seng Index had risen strongly over the last week or so to finish 21,133 as of the end of Monday September 30 before the market closed for the National Day bank holiday.
China stocks mini-boom
Following the Chinese government's announcement of economic stimulus measures last week, FTSE Russell has noted substantial movements in its key China indices.
As of market close on September 30, and coinciding with the commencement of China's Golden Week holiday, the FTSE China A50 Index and FTSE China 50 Index recorded gains of 23.8% and 19.4%, respectively, in the week following September 23 (total returns are in Renminbi and HKD, respectively.)
Notably, the FTSE China A50 Index posted a 7.2% rally on September 30, marking the largest single-day total return since November 2008.
Other FTSE China A indices also experienced significant gains over the same period (total returns in Renminbi): FTSE China A Stock Connect CNH: +25.8%; FTSE China A 200: +24.5%; FTSE China A 600: +25.2%.
