Insights from Frost & Sullivan
The Hong Kong Exchanges and Clearing Limited (HKEX) disclosed in its annual review that as of November 29, 2024, a total of 61 companies were newly listed on the HKEX, a year-on-year decrease of 16.4%. Despite the decline in the number of new listings, the amount raised through initial public offerings (IPOs) reached HK$79 billion, a significant year-on-year increase of 70.6%. The HKEX stated that in 2024, Hong Kong ranked as one of the world's four major new share markets, with its listing activities and fundraising far exceeding those of the previous year. How do you view the performance of Hong Kong IPOs in 2024, and how do you anticipate the IPO situation in 2025, with any new characteristics and changes?
Lu Jing, Partner and Managing Director of Frost & Sullivan Greater China, was interviewed by Jiemian News to discuss the driving forces behind the recovery of the Hong Kong IPO market and future trends.
Jiemian News
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Q:How do you view the performance of Hong Kong IPOs in 2024, and how do you anticipate the IPO situation in 2025, with any new characteristics and changes?
Lu Jing
Partner and Managing Director of Frost & Sullivan Greater China
In 2024, the Hong Kong IPO market experienced a significant recovery and activity year. Against the backdrop of overall global IPO slowdowns, the Hong Kong market demonstrated strong resilience and attractiveness. As of December 31, the Hong Kong Exchanges and Clearing Limited (HKEX) welcomed 71 new listings, raising a total of HK$87.478 billion, an increase of over 88% year-on-year. At the same time, data shows that investors' appetite for subscribing to Hong Kong IPOs has significantly rebounded, with 95.7% of Hong Kong IPO companies receiving over-subscriptions in 2024, 4.7 percentage points higher than in 2023.
The total amount raised through IPOs by the HKEX ranks fourth globally, only behind exchanges in India, the United States, and the United Kingdom. This achievement not only reflects the recovery of market vitality but also demonstrates investors' confidence in the Hong Kong market. In the IPO market, technology, retail, and consumer sectors have become highlights. Especially in the technology sector, due to the HKEX's lowering of the market value threshold for special purpose technology companies and optimizing SPAC merger and acquisition rules, many technology companies have attracted investors to list in Hong Kong. At the same time, the retail and consumer sectors have also performed well, with the listing of several large retail companies driving fundraising in the IPO market. In addition, the liquidity and market sentiment in the Hong Kong market have also improved significantly. The HKEX's continuous reform of trading mechanisms, such as optimizing market structure and reducing listing costs, has attracted more funds into the market. The inflow of international funds, especially from North America and Europe, has further promoted the activity of the Hong Kong stock market.
Looking ahead, with the recovery of the global economy and continuous technological development, the Hong Kong IPO market is expected to continue growing. The HKEX plans to implement further reform measures, including making the spot market system technically compatible with the "T+1" settlement cycle, and optimizing the "Corporate Governance Code" and listing rules, which will further enhance the market's attractiveness and competitiveness. It is expected that the Hong Kong IPO market will continue to show strong vitality in 2025, potentially returning to the top three of global new share markets and creating a fundraising scale exceeding HK$100 billion.
*This interview was publishedin Jiemian Newswith reporter Liu Chenguang, and the original title was: "Hong Kong IPO fundraising for the year soars by over 70%, with 95% of companies receiving over-subscriptions"
