IPO markets: 2020 review and 2021 outlook

IPO markets: 2020 review and 2021 outlook

Review of the mainland China and Hong Kong IPO markets in 2020, and outlook for 2021

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Mainland China and Hong Kong stock exchanges are set to record their most active year since 2011 in terms of proceeds, according to KPMG’s latest analysis of mainland China and Hong Kong’s IPO markets. The Shanghai and Hong Kong bourses, which saw a surge in fundraising activity, were key drivers behind the 23 percent increase in proceeds raised in the global IPO market in 2020, despite continued challenges due to COVID-19.

Over the course of 2020, the Shanghai Stock Exchange combined with Shenzhen Stock Exchange are expected to see a 82 percent increase in terms of funds raised compared with 2019 – recording a combined RMB 461.0 billion from 383 new listings. The strong performance is backed by the continuing popularity of the STAR Market, which has contributed 47 percent of the funds raised in the A-share market during the year, driving the SSE to rank among the global top 3 exchanges in terms of total funds raised.

HKEX meanwhile has seen a 24 percent increase in terms of funds raised – raising a total of HKD 389.9 billion from the 140 IPOs expected to complete by year-end. The increase in fundraising is mainly attributable to homecoming listings, amounting to approximately 34 percent of the funds raised, which is benefiting the city’s financial industry and the capital market.

Although current global uncertainties are expected to continue into 2021, KPMG remains optimistic about the Hong Kong IPO market. Hong Kong will continue to be one of the leading listing destinations next year, driven by the growing ecosystem of innovative and New Economy companies.

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