Taking the World Public: Asian IPO Series
To explore the drivers for this activity, Intralinks, along with Mergermarket, has organised an ‘Asian IPO Series’. The first IPO panel discussion in March, held at, JW Marriott Hotel in Hong Kong, attracted over 50 senior delegates who were keen to learn about the future of Hong Kong’s listing activity.
26 March 2011
According to recent research, Hong Kong still ranks as the world's biggest initial public offering (IPO) hub, raising $52.8 billion in 2010, compared with $42 billion in the US. The figures highlight the shift in global economic activity from the US and Europe to emerging markets, particularly China, a trend that has recently accelerated in the wake of the global financial crisis.
To explore the drivers for this activity, Intralinks, along with Mergermarket, has organised an ‘Asian IPO Series’. The first IPO panel discussion in March, held at, JW Marriott Hotel in Hong Kong, attracted over 50 senior delegates who were keen to learn about the future of Hong Kong’s listing activity. The panel comprised of Mark Dickens, Head of Listing, Hong Kong Exchanges and Clearing; Annie Zhao, Managing Director, Equity Capital Markets, Bank of China International; Esther Leung, Partner & Co-head of Capital Markets, Asia, DLA Piper Hong Kong; Edmond Chan, Partner, Hong Kong Capital Market Services Group, PricewaterhouseCoopers and Rick Smolen, Managing Director, Asia Pacific, Intralinks.
The panel’s general perception was that Hong Kong remains a strong market for IPO due to its regulation and governance. Mark Dickens, Head of Listing, Hong Kong Exchanges and Clearing also explained that despite tough competition, the Chinese exchanges of Shanghai and Shenzhen did not pose an immediate threat to listing activity in Hong Kong as international investors may wait for the internationalization of the Renminbi (RMB) before listing in China.
The panel also agreed that the proposed merger between the Singapore and Australian stock exchanges will not affect Hong Kong as the territory’s listings yield a higher private equity ratio and its financial markets are more liquid than those in Singapore. As a result, there has been steady interest from Australian and Singapore based companies looking to list in Hong Kong since the announcement of the merger, not the other way around as expected.
When asked about whether the Hong Kong Stock Exchange would be seeking its own tie-ups, Mark Dickens said there was no pressure for Hong Kong to find a partner as it has the ability to merge with anyone, only if it makes strategic sense. However, when quizzed he admitted that the ideal partner for the exchange would be either Shanghai or Shenzhen.
Edmond Chan, Partner, Hong Kong Capital Market Services Group, PricewaterhouseCoopers said that there is a trend for international luxury brands to list in Hong Kong as they are seeking access to the Chinese economy in order to seek out superior returns. He added the Mineral and Energy sectors, particularly Alternative Energy, will be a key focus for Hong Kong going forward and the Financial Services sector also has a lot of potential for growth.
Overall, Hong Kong’s reputation as a financial hub still remains and it’s exciting to think that Hong Kong is leading the way in Asian IPO’s. However, Singaporean IPO activities are quickly catching up and I look forward to the next panel discussion in Singapore at the end of March to explore this further. Visit here to sign up and see you there!