Mainland China & Hong Kong: most active IPO year since 2011

Analysis from KPMG’s latest ‘2020 review of the Mainland China and Hong Kong IPOs and other market trends’, the company reported tha Mainland China and Hong Kong stock exchanges are both set to record their most active year since 2011 for IPO markets. In particular, Shanghai and Hong Kong saw a surge in fundraising activity which has been reported as a key driver behind the 23% increase in proceeds raised in the global IPO market, despite continued challenges caused by COVID-19.

When it comes to global rankings, respectively, Hong Kong Stock Exchange (HKEX), Shanghai Stock Exchange (SSE), and Shenzhen Stock Exchange (SZSE) will take second, third and fifth place, with total funds raised reaching US$50.3bn, US$49.9bn and US$18.5bn.

"Despite prevailing uncertainties marked by the COVID-19 outbreak as well as political, social and economic concerns, the global IPO markets remained resilient and ended strong in 2020. As businesses gradually adapt to the new normal and with the rollout of COVID-19 vaccines, there is a good chance for the global economy as well as the capital markets to rebound in the coming year,” commented Paul Lau, Partner, Head of Capital Markets, KPMG China.

Other findings in the report:

• SSE combined with SZSE are expected to see an 82% increase in funds raised compared to 2019, recording a combined US$70.4bn
• The strong performance is back by the popularity of the STAR Market which contributed 47% of the funds raised
• HKEX has seen a 24% increase in funds raised compared to 2019, expecting to raise a total of US$50.3bn by the end of 2020, which is mostly attributed to homecoming listings, totaling 34% of the funds 
• Semiconductor Manufacturing International Corp. raised US$7.5bn on the SSE's STAR Market
• JD.com on the HKEX raised US$4.5bn 
• Beijing-Shanghai High Speed Railway Co., Ltd. in Shanghai raised US$4.bn
• In Hong Kong 22 healthcare/life sciences companies were listed rasing US$12.7bn and contributing 25% of the total funds

"Benefiting from the new listing chapter launched in 2018, Hong Kong has been serving strong investor demand for high quality healthcare listings such as companies engaged in research and development of cancer treatments, autoimmune disease treatments, medical devices, etc. Following the strengthened ecosystem in Hong Kong with more biotech-experienced investors, investment bankers, lawyers, research analysts and financial advisers, we expect more companies to follow suit in the coming year,” concluded Irene Chu, Partner, Head of New Economy and Life Sciences, Hong Kong, KPMG China.

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