HONG KONG: Total funds raised in the Hong Kong stock market have dropped to an eight-year low but the city still ranks top as the largest IPO market worldwide, according to data from Thomson Reuters. A combined total of just US$39.4 billion was raised in Hong Kong through initial public offerings (IPO), share placements, rights issues and other offerings this year, down 57 per cent from US$91.68 billion in 2015. It’s the lowest amount raised in the local stock market since the financial crisis in 2008.
The total funds raised in Hong Kong through IPO dropped by 26 per cent to US$24.35 billion, compared with US$33 billion last year. It is, however, still enough for Hong Kong Exchanges and Clearing to rank No.1 among global IPO markets this year, the second consecutive year it has taken the top spot. The funds raised in Hong Kong, according to the data, beat Shanghai Stock Exchange in second place with US$16 billion and New York Stock Exchange on US$11.87 billion. Shenzhen Stock Exchange’s ChiNext, the Chinese equivalent of the Nasdaq, ranked the 10th biggest IPO market worldwide, with US$3.99 billion raised.
Joseph Tong, chairman of Morton Securities, said the IPO market and other fund raising channels have been hurt by poor market sentiment. “This year was full of surprises and uncertainties, with the Brexit vote result in June and Donald Trump winning the US president election. China’s economic slowdown and the weak yuan also hurt overall investment sentiment,” Tong said. “The devaluation of the yuan has led Beijing to introduce measures to prevent capital outflow. This has slowed down the process for companies and individuals to bring their money out of the country to invest in a new listing or any share placement in Hong Kong.”
