TIMES.KY

Cayman Islands, Caribbeanand International News
Friday, Apr 26, 2024

Hong Kong listings dry up under shadow of protests

Hong Kong listings dry up under shadow of protests

‘Terrible’ conditions on stock market deter deals but some expect pipeline to pick up later in year

When AB InBev’s Asia brewing business launched its second attempt at a Hong Kong stock market listing last week, chief executive Jan Craps faced a volley of questions about whether the territory was still the best venue for an initial public offering of almost $5bn after more than three months of political upheaval.

“We believe Hong Kong is the best financial centre for us in Asia to do the listing,” he said. “There is a very bright future for Hong Kong as a financial centre.”

Mr Craps is unusually upbeat. The flow of initial public offerings in Hong Kong has nearly evaporated in recent months, as companies hold off on planned listings in the face of volatility spurred by an escalating US-China trade war and intensifying violence between police and protesters on the Asian financial hub’s streets.

Hong Kong Exchanges and Clearing, the local bourse operator, has seen only two IPOs price since the end of July, raising a total of just $33m and taking cumulative funds raised in 2019 to $10.7bn, according to data from Dealogic.

That is just a third of the total from this time last year, when Hong Kong was well on its way to taking the global listings crown for 2018. Meanwhile, the number of active listings applications from companies yet to go ahead with an offering has climbed to a record high of more than 200, according to KPMG.

The fall is particularly sharp thanks to a run of big-ticket listings in 2018 that saw Xiaomi, Meituan Dianping and China Tower raise almost $16bn in total between the end of June and mid-September.

But HKEX’s rivals in New York have seen no such drop-off. The New York Stock Exchange and Nasdaq have priced a combined $5.39bn worth of IPOs in August and September across 19 deals. Both are now on a course to dethrone Hong Kong’s exchange as the world’s top listings destination just as it targets London Stock Exchange shareholders with a charm offensive, selling them on Hong Kong’s potential as the gateway to a globalising Chinese market in its bid to buy the British bourse.

Jason Elder, a partner at law firm Mayer Brown in Hong Kong, said the uptick in volatility for the territory’s stock market had unnerved companies that were in the process of listing this year.

“It becomes very difficult to price your IPO against a volatile window, I think that’s why people are waiting,” Mr Elder said. But he added there was little sign of companies abandoning Hong Kong for other bourses, with recent reforms to the exchange’s listing rules — such as allowing weighted voting rights — helping prevent applicants from changing venues.

“That all helps, but it only helps against a backdrop of positive investor sentiment,” he said.

Sentiment in Hong Kong has worsened markedly since the end of July, with the Hang Seng stock index falling 9 per cent in early August. Earlier this month, Fitch became the first big rating agency to downgrade the territory since the start of mass protests demanding withdrawal of an extradition bill that would have allowed criminal suspects to be sent to mainland China.

Protester demands have since expanded to include greater police accountability and democratic reforms, with large-scale demonstrations continuing despite plans announced by Carrie Lam, Hong Kong’s chief executive, to fully withdraw the bill.

“The Hong Kong IPO market has been absolutely terrible,” said the head of Asia capital markets at one international bank. He added his bank and others had also begun opening credit lines to many high-growth private companies in the region, relieving the pressure for a quick listing.

Hong Kong also faces a challenge from China’s new technology and science-focused Star Market in Shanghai. The high-profile project has direct backing from president Xi Jinping and threatens to swipe Chinese tech listings away from the territory, although there is no sign yet that it could touch bigger deals such as AB InBev or the planned secondary listing of Alibaba, which could raise up to $20bn if it goes ahead.

Louis Lau, a partner at KPMG China’s capital markets advisory group, said there were “a lot of uncertainties, globally and locally” behind the quiet spell for IPOs, including the market impacts of trade tensions and recent social unrest in Hong Kong. “It all depends on the market conditions,” he said.

KPMG expects the taps of Hong Kong’s IPO pipeline to turn back on in the fourth quarter amid encouraging signs such as the AB InBev listing and the revival of another application by logistics company ESR Cayman. But Mr Lau added that the chance of Hong Kong catching up with New York’s bourses by the year’s end really depended on whether all big deals, such as that by Alibaba, are completed by the end of the year.

“Otherwise the gap is pretty big,” he said.

Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×