Geopolitical and economic uncertainties continue to weigh on global markets, with proceeds from initial public offerings (IPO) in the United States and Hong Kong dropping by 94% and 76% respectively during the first nine months of the year compared to the same period in 2021, according to KPMG China’s 2022 Q3 review of the Mainland China and Hong Kong IPO markets. On the upside, Hong Kong saw an increase in IPO activities during the third quarter, with 27 IPOs raising a total of USD 6.6 billion, more than twice the proceeds raised during the first two quarters of 2022.

Local authorities are now reviewing the rules needed to accommodate listings of specialist tech enterprises that are still in their early stages of commercialisation. Market consultation of the new regime for these specialist technology companies is expected to be released in the coming weeks with the aim to finalise the rule changes by as early as the end of 2022.  This could provide access to the Hong Kong market for large-scale tech companies in sectors ranging from AI, semiconductors, cloud computing, robotics to new energy who currently do not meet the listing requirements.

In the meantime, the city continues to develop a fund-raising and investment ecosystem for biotech firms. Life science listings and homecoming listings will remain the main focus for IPOs in Hong Kong. With a healthy pipeline of over 130 applicants, the city’s IPO market is expected to strengthen further as uncertainties diminish over time.