Hong Kong IPOs Show Signs of Recovery

Fundraising activities in Hong Kong are experiencing a notable resurgence, bolstered by a robust initial public offering (IPO) pipeline and increased follow-on fundraising efforts, according to Hong Kong Exchanges and Clearing Limited (HKEX) CEO Bonnie Chan. In the second quarter, 18 companies collectively raised 8.6 billion Hong Kong dollars (approximately $1.1 billion), marking a 50% increase in new listings and a 79% rise in funds raised compared to the previous quarter. Chan highlighted that there have already been 43 IPOs this year, with many more anticipated. Chan emphasized that evaluating Hong Kong solely as a fundraising hub through IPOs is "too one dimensional." She noted that the exchange has also facilitated substantial follow-on fundraising for listed companies, which has included additional financing and convertible bond issuance. These efforts have enabled companies to raise over $20 billion, attracting global investors, particularly from Greater China, despite a lack of participation from U.S. investors in recent major deals. The resurgence in fundraising comes amid challenges faced by the Asian financial hub, including high U.S. interest rates and regulatory scrutiny. However, Chan expressed a "cautiously optimistic" outlook for the exchange, especially as Beijing promotes the high-quality development of venture capital and implements measures to support mainland companies listing in Hong Kong. HKEX's recent interim report indicates record highs in revenue and profit for the second quarter, with a 9% year-over-year profit increase to HK$3.16 billion. This positive performance marks a strong beginning for Chan, who assumed the CEO role in March, alongside newly appointed chairman Carlson Tong Ka-Shing.