The bar is set for 2019 after the Hong Kong Stock
Exchange claimed the number one spot as the top IPO market
globally last year. The HKEX saw 125 companies raising $36.5
billion in 2018, up 175.5% from the year before.
Meanwhile the New York Stock Exchange had 64 IPOs that
raised $28.9 billion. Nasdaq was the most active exchange by
volume with a total of 190 listings, including a number of tech
listings from mainland Chinese companies. As for the
telecommunications, media and technology sector, which remains
hot, Tokyo saw the most listings, followed by Hong Kong.
2018 was a year of major reforms for the HKEX, with new
listing rules allowing dual-class shares for the first time, as
well as an initiative encouraging pre-revenue biotech
companies to list. The rules enabled a number of new
economy companies in the PRC to come to Hong Kong to raise
capital, including smartphone maker Xiaomi, which raised $5.4
billion. Tech IPOs shot up 94.4% compared to 2017, raising
HK$136 billion ($17.4 billion), which accounted for nearly half
of total IPO fundraising in 2018.
Will the good times continue into 2019 for Hong Kong? With
the ongoing trade war with the US, an economic slowdown at home
and rising interest rates, the next year could be tough for the
Yet industry participants remain optimistic. According to
Deloitte the IPO momentum will continue, with around 200
offerings predicted to raise an estimated HK$180 to $230
billion in 2019. Listing platforms in both mainland China and
Hong Kong should complement and supplement each other to a
greater degree throughout the year as a result of the Greater
Bay Area's continuing development, while more Chinese unicorns
are expected to further drive the new economy forward.
Meanwhile, in mainland China, authorities are busy making
preparations to attract more listings to the Shanghai and
Shenzhen stock exchanges. For instance, there's the new
technology and innovation board, which will experiment with a
registration-based system for listed companies rather than an
approval-based system, and of course the Shanghai-London Stock
Connect. That is certainly a lot of work cut out for Yi Huiman,
the newly appointed head of the China Securities Regulatory
Commission. The main question for 2019 is: will mainland
Chinese companies continue to opt for Hong Kong as in 2018, or
will they choose to remain on mainland PRC soil?