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Hong Kong’s IPO pipeline continues to be robust regardless of Beijing’s regulatory crackdown, HKEX chief says

Hong Kong’s pipeline for preliminary public choices stays robust — although there may be extra warning in the intervening time, given China’s elevated regulatory scrutiny, the chief government of Hong Kong Trade and Clearing instructed CNBC.

“Within the brief time period, clearly … this motion will trigger some potential issuers to be somewhat bit extra cautious and attempt to see when it is the suitable time to go to the market,” Nicolas Aguzin instructed CNBC’s Emily Tan on Wednesday.

Hong Kong markets went right into a tailspin in late July after China tightened guidelines on the personal schooling trade as a part of a broader pattern of accelerating regulation in sectors similar to know-how and ride-hailing.

Final week, shares of gaming big Tencent plunged 10% following an article by Chinese language state media that referred to as on-line gaming “opium,” urging the trade to forestall habit amongst kids.

“When you will have volatility, it is normally rather less seemingly that individuals will need to rush into the market,” Aguzin stated. “However over the long run, proper now, we’re trying on the pipeline, there’s over 200 firms … with their filings within the docket.”

A report variety of 46 firms listed in Hong Kong within the first half of 2021. Whole funds raised got here to $211.7 billion Hong Kong {dollars} ($27.2 billion) from January to June this yr — up 128% from the identical interval in 2020.

Hong Kong is ranked in third place globally by way of IPO funds raised for the primary half of 2021, HKEX stated in its interim outcomes.

HKEX earnings

Hong Kong Trade and Clearing on Wednesday introduced report revenues and income for the primary six months of the yr.

It was pushed by “a buoyant IPO market, robust buying and selling volumes and vital momentum in Inventory Join,” Aguzin stated in a press release.

Inventory Join packages permit mainland traders to commerce some shares in Hong Kong, known as southbound securities. This system additionally permits overseas traders to commerce some shares listed in Shanghai and Shenzhen — known as northbound commerce.

Buying and selling volumes as a part of Inventory Join hit new highs, with a mean day by day turnover worth of 114.four billion Chinese language yuan ($17.6 billion) for northbound flows, up 54% from the primary half of 2020.

Southbound flows had a mean day by day turnover worth of $48.1 billion, up 132% from the identical interval final yr, in accordance with the earnings report.

“Our key strategic and aggressive benefit is being China-anchored and linked to China,” stated Aguzin.

“We’ve numerous our outcomes which have some connectivity to China. We predict that’s nice, that can proceed attracting worldwide traders,” he instructed CNBC.

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