Analysis
HONG KONG – Hong Kong has beaten all the other capital markets in the world to raise over HK$105 billion (US$13.38 billion) through initial public offerings (IPOs) in the first half of this year, as capital inflows into the city continues amid global market jitters.
The Hong Kong Exchanges and Clearing Limited (HKEX) data showed that 42 companies were listed in the first six months, up 40 percent from the same period last year. Total funds raised stood at the highest since 2021, crushing the HK$87.6 billion annual total in 2024.
The HKEX claimed top spot worldwide in terms of total IPO proceeds in the first half of this year, well ahead of Nasdaq’s HK$71.3 billion, a Deloitte report showed.
Industry insiders say Hong Kong’s securities market became a global investors’ go-to platform to add Chinese assets to their portfolios.
Capital inflow into Hong Kong has risen from US$366 billion at the beginning of last year to US$605 billion in April, the highest since 2000, data from Hang Seng Bank showed.
Many global investors first look to Hong Kong to diversify risks, and, impressed by the economic vitality of the Chinese mainland and Hong Kong, chose to increase their holdings, said Paul Chan Mo-po, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government.
Pro-growth policy efforts from the central government and the HKSAR’s measures to streamline listing procedures have worked together to lift Hong Kong’s stock market, said HKEX Chairman Carlson Tong Ka-shing.
Among this year’s new IPOs, crowd favorites are those of tech firms in artificial intelligence, 5G and smart vehicles, as well as new consumption companies, which cultivate and profit on consumer behaviors with the help of new technologies. Both are signatures of China’s economic upgrades.
Chinese electric vehicle (EV) battery maker Contemporary Amperex Technology (CATL) raised over HK$40 billion in May, drawing investments from Europe, the Middle East and the United States. It is the largest IPO in Hong Kong in recent years and a shoo-in for the largest worldwide this year.
As flag bearers of new consumption trends, bubble tea makers like Mixue Bingcheng and Auntea Jenny marked memorable H1 IPOs, while Chinese fast food chain Home Original Chicken and snack brand Three Squirrels are waiting in line.
The avid investor turnout to these new consumption IPOs is a token of faith in the resilience of China’s domestic demand, as these companies have developed tried and tested business models to meet the needs of younger consumers, analysts say.
Hong Kong’s IPO market is expected to maintain steam in the second half. Edward Au, southern region managing partner of Deloitte China, said there are currently more than 170 applications in progress and estimated that a total of 80 IPOs will raise around HK$200 billion this year.
As dependence on US dollar-denominated assets wanes, global investors are increasingly seeking to diversify their portfolios, said Tong, adding that the HKEX is working with counterparts in the Middle East and Southeast Asia to widen access to funding for tech firms worldwide.
– Xinhua
