Hong Kong listings have picked up pace with almost $10bn raised from initial public offerings over the past two months despite a deepening political crisis that has gripped the Asian financial hub for more than five months.
Recent listings included a revived $5bn IPO by brewer Anheuser-Busch InBev’s Asia-Pacific unit; a $1.1bn fundraising from Topsports International, China’s biggest sportswear group; and a $1.6 listing by Asia-focused logistics company ESR Cayman.
Both the AB InBev and ESR deals were second attempts after plans earlier in the year were aborted, and have helped to revive the flow of deals that nearly evaporated during a rough patch for Hong Kong’s stock market.
Dickie Wong, executive director of research at Hong Kong-based Kingston Financial, said the AB InBev listing had bolstered sentiment, with six smaller listings making double-digit gains on debut. On Monday, Ascentage Pharma, a biotechnology company, added a seventh to the list, rising as much as 56 per cent on its first day of trading.
With the US-China trade war escalating and intensifying violence between protesters and police in Hong Kong weighing on local equities, the benchmark Hang Seng Index fell into the red for much of the summer — already a quiet period. That prompted many companies to hold off planned listings.
Limited government concessions to pro-democracy protesters and an easing of US-China tensions have helped Hong Kong stocks climb back into the black for 2019.
Even so, the Hang Seng is only up 4 per cent this year and at the weekend, Paul Chan, Hong Kong’s financial secretary, said the territory’s economy had fallen into a technical recession. Official third-quarter growth figures are due to be published later in the week.
Hong Kong offerings have raised a combined $9.6bn over the past two months, according to data from Dealogic, handily besting the New York Stock Exchange and Nasdaq, which saw $2.3bn and $6.9bn raised from IPOs during the period.
That flurry has helped take the year-to-date total for Hong Kong to $19.1bn but that is still down more than a third from the same period a year ago. The amount raised on the NYSE is down 16 per cent while that on the tech-focused Nasdaq is up 13 per cent for the period at $30.1bn, putting it comfortably in the lead.
That leaves Hong Kong on track to cede its listings crown to New York despite the recent string of IPOs. That would cap a troubled year for bourse operator Hong Kong Exchanges and Clearing, which tried to acquire the London Stock Exchange but was rebuffed outright and withdrew its bid earlier this month.
Mr Wong also noted that six of the seven stocks that listed in late October had reversed those gains and were down by double-digits from their IPO prices.
“I think the IPO mania will be short-lived,” he said.