KPMG released its latest IPO Markets report on HongKong and Mainland China.
KPMG analysis finds that Hong Kong recorded 69 IPOs in the first half of 2017, almost doubled from the 38 IPOs recorded over the same period of time last year. However, total fundraising increased by only 22 percent to HKD53 billion from HKD43.5 billion in 2016 H1 due to the dominance of small to medium sized IPOs.
The latest consultation to tighten GEM listing requirements and the subsequent adjustment to the existing Main Board eligibility criteria may lead to an influx of applications for both Main Board and GEM listings in the interim. We forecast there will be around 80 Main Board IPOs and 70 GEM IPOs worth a combined HKD 170 billion for the full year in Hong Kong.
The A-share IPO market, on the other hand, had a strong 2017 H1. Up to 247 companies floated their shares on the Shanghai and Shenzhen stock exchanges, which already surpassed the number of IPOs for full year 2016. This is also the highest first half figure in 10 years. Meanwhile, total fundraising stood at RMB 125.4 billion, which is more than four times over 2016 H1.
KPMG expects IPO activity to continue to be strong in the second half of the year as the regulators continue to focus on clearing the pipeline. The number of active applications has gone down from 681 at the end of 2016 to 549 as at 15 June. New A-share listings are expected to hit a 10-year high of around 400, raising approximately RMB 220 billion in 2017.
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