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The momentum in Hong Kong's initial public offering (IPO) market is set to continue building as positive signals indicate more mega deals on the horizon, according to bourse operator chief Bonnie Chan Yiting.
"I do expect the activity and this very positive momentum to carry on given that we're seeing a lot of very good signs in the IPO market," Chan, the CEO of Hong Kong Exchanges and Clearing (HKEX), said after the trading debut of Midea Group on Tuesday.
The world's largest maker of home appliances raised HK$31.01 billion (US$3.98 billion) in the city's largest IPO in more than three years. With strong investor interest, Midea may exercise an overallotment option that would expand the deal size to US$4.6 billion, making it the world's second-largest fundraising exercise this year.
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More mega deals could come to fruition in Hong Kong, as mainland Chinese authorities continue to encourage leading Chinese enterprises to list in the city, Chan said. "We have a perfect example today in the form of this very symbolic IPO of Midea Group," she said.
The IPO vaulted Hong Kong into the top five listing venues globally, according to fundraising amount, Chan said. The city had dropped to 13th on that ranking in the first half of the year, a letdown from its status as the world's top IPO destination in seven of the past 15 years.
In April, the China Securities Regulatory Commission unveiled five measures to support Hong Kong's capital markets. Chan said that during a recent visit to the mainland, authorities were consistent in their support for Hong Kong's status as an international financial centre.
The logo of Hong Kong bourse operator Hong Kong Exchanges and Clearing is seen at its headquarters in Central on June 5, 2024. Photo: Edmond So alt=The logo of Hong Kong bourse operator Hong Kong Exchanges and Clearing is seen at its headquarters in Central on June 5, 2024. Photo: Edmond So>
In addition to IPO activity, the city's secondary fundraising market is on the rise, with more than US$20 billion in follow-on fundraising being completed so far this year, according to Chan.
Upbeat investor sentiment has also been evident in the recent inclusion of Alibaba Group Holding's shares in the city's cross-border Stock Connect programme.