HONG Kong Exchanges & Clearing (HKEX) is anticipating the comeback of big ticket initial public offerings (IPOs) to the city as underlying conditions improve and Chinese regulators give a helping hand, according to its chief executive officer.
The exchange currently has 100 applicants waiting to list in the city, CEO Bonnie Chan said on Thursday (May 9) on the sidelines of the Saudi Capital Markets Forum in Hong Kong.
“What we have seen lately, in the last two weeks of April, it’s giving us a lot of hope,” she said.
Chan took over the bourse in March during a prolonged slump in IPOs and stock trading. IPO proceeds in 2023 fell to the lowest level in two decades and have seen a sluggish start to this year.
Still, trading has picked up recently as China pledged supportive measures, including encouraging more leading mainland firms to list in Hong Kong, and expanding the signature trading links between Shanghai and Shenzhen and Hong Kong.
The benchmark Hong Kong stock index has surged 23 per cent since a low in January, boosting trading and offering support for potential IPOs.
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Only 15 companies have listed on HKEX so far this year, raising a total of US$998.6 million, compared with 22 and US$1.7 billion in the same period last year. In the biggest debut in 2024, Chinese bubble tea maker Sichuan Baicha Baidao Industrial plunged 27 per cent on its first day of trading.
Many of the Chinese firms to potentially list in Hong Kong will likely be in the specialised technology sector, Chan said.
HKEX tailor-made a rulebook to enable these advanced tech firms to sell shares with a lower profit threshold last year.
Chan declined to comment on specific names, though it has been speculated that Chinese giants such as Ant Group and car-hailing app Didi Global would seek to list in the city.
HKEX, and the city as a whole, has long been trying to attract business from Saudi Arabia, including a listing from oil giant Saudi Aramco. HKEX has already listed Asia’s first Saudi ETF and added the Saudi Exchange as a recognised bourse, smoothing the way for firms to sell shares in the city.
Chan said it was just a matter of time for Saudi companies to list in Hong Kong and vice versa.
Chan was co-chief operating officer before her elevation to the top job, becoming the first woman to lead the exchange. She was previously a partner at law firm Davis Polk & Wardwell, serving clients including Tencent Holdings. The Harvard University-educated Chan also led the IPO Transactions Department in a previous stint at the bourse. BLOOMBERG