June 18, 2024

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Hong Kong’s IPO market is still in a slump despite an expected rebound

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Hong Kong Street Scene, Mongkok District with busses

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Hong Kong’s initial public listing market remains in a slump, even as analysts predicted a market rebound in the second half of the year.

“The Hong Kong market has not recovered as much as we would like,” Irene Chu, partner at KPMG China, told CNBC.

In the first three quarters of the year, the Hong Kong IPO market concluded 44 listings, and raised 24.6 billion Hong Kong dollars ($3.14 billion), according to KPMG. It represented a drop of 65% in deal count and 15% in proceeds respectively compared to the same period last year, the firm said.

Hong Kong’s stock market was among the worst performing last year, shedding 15% in 2022 for its third-straight year of declines. In October, the Hang Seng Index and Hang Seng Tech Index fell to their lowest levels since November 2022.

The general sentiment has not yet recovered. We cannot expect the IPO market to rebound quickly or be comparable with the good old days.

Ringo Choi

Asia-Pacific IPO leader, EY

“The Hong Kong market is already at [a] very low point [compared to] the good old days in 2020 or before that. So the general sentiment has not yet recovered. We cannot expect the IPO market to rebound quickly or be comparable with the good old days,” said Ringo Choi, Asia-Pacific IPO leader at EY.

A June report by EY and a mid-year review released by KPMG China predicted the Hong Kong IPO market could rebound in the second half of 2023.

On Oct. 27, the market debut of J&T Express, a Tencent-backed Indonesian logistics service provider, put up a lackluster performance. Shares opened flat and subsequently ended 1.33% lower.

J&T, the second largest listing in Hong Kong this year, had originally expected to raise at least $1 billion in the listing but cut the target by half on the back of weak investor sentiment, according to Reuters.

“The Hong Kong stock market remained weak in Q3 2023, as did stock valuations, because of macroeconomic developments, in…



2023-11-05 19:39:00

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