For the moment, aluminum products manufacturer China Zhongwang is on top – its US$1.3 billion Hong Kong listing in late April is the world’s largest this year. But the company’s success suggests that relatively cool global market for initial public offerings (IPOs) may finally be heating up.
“We see a healthy pipeline of deals for the coming months and through to 2010,” said Mark Warburton, head of equity and capital markets at Macquarie Capital, which was lead the underwriter for Zhongwang’s IPO.
PricewaterhouseCoopers (PwC) expects 35 listings in Hong Kong this year, with proceeds reaching US$9 billion, up from US$8.5 billion in 2008. More than 80% of this will come from Chinese firms in retail, consumer goods, and industries related to the US$586 billion stimulus package.
In addition, Beijing is preparing to end the freeze on A-share listings, perhaps in as a little as a month’s time, according to Richard Sun, a PwC partner in Hong Kong.
“The IPO market for A-shares will definitely pick up again. You can’t continue to push your economy without reopening opening the IPO market,” he said.
Should the market reopen, Sun expects as many as 88 IPOs in China, eight big listings in Shanghai and 80 smaller ones in Shenzhen. Total funds raised could reach US$22.2 billion.