Hong Kong No Longer Among World’s Top Three IPO Venues

(Bloomberg) --

Hong Kong is not part of the top three listing venues globally for the first time in six years, as a slow start to 2020 has weighed on initial public offering activity.

Companies have raised only $3.2 billion through IPOs in the financial hub this year, putting it in fifth place behind exchanges in mainland China and New York, according to data compiled by Bloomberg. Shanghai leads the pack, with almost $14 billion of IPO proceeds, thanks to Beijing-Shanghai High Speed Railway Co.’s $4.3 billion float in January. Some $11.6 billion was raised through new offerings on the New York Stock Exchange and $8.1 billion on the Nasdaq, while Shenzhen sits in fourth place with $3.4 billion.

Hong Kong was the world’s top listing venue last year, with more than $40 billion raised. Since 2015, it has always been No. 1, except in 2017, when it ranked third with $16 billion, the data show. To be sure, there is still more than half the year to go and the city may well catch up with a spate of larger deals lining up, including second listings by JD.com Inc. and NetEase Inc.

IPO activity slowed to a trickle after the Lunar New Year holidays at the end of January, as the coronavirus outbreak rattled markets and issuers opted to stay on the sidelines. The biggest deal of 2020 has raised just $383 million -- a billion-dollar plus IPO had already come to the market by this time last year. This year’s haul is down 36% from the same period last year.

“Investors are more risk averse and don’t want to place big bets unless they already understand a company well,” said Edward Au, Deloitte’s co-leader of the national public offering group.

Still, the companies that have listed since March have proved incredibly popular with investors, who have rushed to back health-care and biotech names amid the coronavirus pandemic.

Read More: Another H.K. Biotech IPO, Another Blowout Deal

UPCOMING LISTINGS:

• Dada Nexus Ltd.
  • Nasdaq exchange
  • Size about $500m
  • Filed May 12
  • Goldman Sachs, Bank of America, Jefferies
• Legend Biotech Corp.
  • Nasdaq exchange
  • Filed May 13
  • Morgan Stanley, JPMorgan, Jefferies
• Yeahka Ltd.
  • Hong Kong stock exchange
  • Size up to $212m
  • Pricing May 25, trading June 1
  • CLSA, Nomura, ABC International
• Kintor Pharmaceutical Ltd.
  • Hong Kong stock exchange
  • Size $240m
  • Listing May 22
  • Huatai, UBS, CICC
• Ebang International Holdings Inc.
  • New York
  • Size $100m
  • Filed April 25
  • AMTD, Loop Capital Markets

More ECM situations we are following:

• Tencent-backed Yeahka Ltd. is offering 98.7 million shares at HK$12.64-HK$16.64 each in its Hong Kong initial public offering, according to a prospectus filed to the stock exchange.

See also:

• Asia ECM Weekly Agenda
• IPO data
• U.S. ECM Watch
• EU ECM Watch
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