Hong Kong and Mainland IPO Markets
Updates for the First 10 months of 2012
In the first 10 months of 2012, Hong Kong's initial public offering (IPO) market was hit by various factors, including the global economy slowdown, and merely completed 51 IPOs, according to the latest statistics released by Deloitte China's National Public Offering Group. Compared with the same period of last year, the proceeds raised by the Hong Kong IPO market has dropped from HK$221.4 billion by nearly 80% to HK$48.9 billion, reaching a record low since 2004. At the same time, the number of Chinese Mainland IPOs plummeted along with various regulatory and market factors as well. The Chinese Mainland recorded 153 new listings and raised proceeds of RMB103.4 billion (nearly 60% less than RMB249.5 billion when compared with the same period of last year.)
Market choppiness stymied IPO plans and led to a no-show of IPO on the Main Board of Hong Kong in this May and September. As the global economy has gradually reactivated since September, some of the shelved IPOs are expected to re-launch later. We expect about 65 companies to be newly listed in Hong Kong by the end of 2012, raising approximately HK$70-90 billion. Compared with 2011, both the deal flow and deal volume are expected to drop by 28% and 67-78% respectively.
The listing application review for the A-share market has slowed down significantly since May. In August, no offering review meeting was held. Deloitte China forecasted that the A-share market to continue to be impacted by the tight liquidity and weak corporate earnings. About 170 new listings (40% fewer than 2011) and approximately RMB120-140 billion IPO proceeds (50-57% less than 2011) would be recorded for 2012.