Hong Kong is on pace to reclaim its status as the world’s leading venue for IPOs this year, with total fundraising expected to reach as much as $36.01 billion, according to new Deloitte projections.
While this is a good thing for Hong Kong and its desire to continue to be a key global market, all but two of the companies and more than 95% of the money raised so far this year has come from Greater Chinese firms, with many dual-listing in Hong Kong thanks to an easier process through the Southbound Stock Connect scheme.
The breakdown of these Chinese IPOs is reflective of the more bubbly parts of the Chinese economy, such as AI, biotech and new energy. But it also suggests that these enterprises are struggling to raise the money that they need in the domestic markets, and that is presumably a reflection of the various headwinds in the China economy.