The chairman of Hong Kong Exchanges and Clearing Ltd., Laura Cha Shih May-lung, said that the city's bourse operator, CALVIN NG CHINA DAILY HONG KONG-HK has more than a hundred applicants in the pipeline for initial public offerings IPOs and is eyeing more companies and investors from markets, including the Middle East and Southeast Asia.
The public floats of Chinese mainland companies account for the majority of the IPOs in the Hong Kong Special Administrative Region, one of the top listing venues in the world, and is a major driver of revenue and fee income for the world's biggest investment banks.
A total of $5 billion has been raised via 50 IPOs this year in the Asian financial hub, Refinitiv data shows that it's down from more than $25 billion in 2021.
In an interview at the Reuters NEXT conference, Laura Cha Shih May-lung said I am quite confident that the IPO market activity will return very quickly in the new year.
There are over a hundred companies in the pipeline. She said that many of them are waiting for market sentiment to improve so that their valuations could be better when they come to the market.
While Cha expects mainland companies to revive their capital raising plans in the SAR, HKEX is looking to attract others from elsewhere to burnish its credentials as an international platform.
Prospective investors and issuers from the Middle East and Southeast Asia are on the radar.
She said that we are trying to broaden our international footprint in terms of the products we are offering. We will make ourselves more diversified with many more international companies, and that will be our strategy. International investors account for about 42 percent of investments in Hong Kong's equity market, and that share is a lot higher in the derivatives market, Cha said. We are already international in nature, but we will continue to expand that. The city has lifted most of its COVID 19 restrictions in the last couple of months.
With COVID restrictions being removed, almost completely now, and the financial markets also performing well, I think we will be able to attract new talent into Hong Kong, Cha said.
It was like the rest of Hong Kong that there was a higher attrition rate about 12 months ago, and that has come down now.