Hong Kong set to reclaim top five IPO ranking in 2024, says KPMG

Rebound in activity and Middle East connections highlight growth potential

11 December 2024, Hong Kong (SAR), China ("Hong Kong") – Driven by a number of sizeable IPO deals during the second half of the year, Hong Kong is expected to rank fourth globally in terms of IPO funds raised in 2024, reclaiming its position among top five global IPO markets, according to KPMG's Chinese Mainland and Hong Kong IPO Markets 2024 Review and 2025 Outlook. This performance underscores improved investor confidence, generating positive momentum that is expected to continue into 2025. Additionally, the city’s enhanced connectivity with the Middle East is expected to help facilitate potential secondary listings from the region.

In 2024, global IPO markets raised a total of USD 119.1 billion across 1,159 deals, marking declines of 9% in funds raised and 15% in deal volume compared to 2023. India is expected to lead global stock exchanges in terms of both funds raised and deal volume, with the US stock exchanges following closely. Hong Kong and Shanghai will likely end the year at fourth and fifth respectively.

Paul Lau, Partner, Head of Capital Markets and Professional Practice, KPMG China, says:

The global IPO market, excluding Asia Pacific, has gained momentum in 2024, which is a very good sign. We remain cautiously optimistic about a positive outlook for 2025. However, uncertainty around trade policies and geopolitics, particularly due to the new US administration, does cast a shadow over this optimism. It's important for all stakeholders to collaborate and ensure a stable environment that supports growth and prosperity in the global capital market landscape.

The A-share market raised RMB 119.1 billion across 125 deals in 2024, reflecting declines of 68% in funds raised and 61% in deal volume compared to 2023. The IPO pipeline also shrank significantly, from 779 deals at the end of 2023 to 293 as of 8 December 2024.

Nearly half of total proceeds in 2024 came from Real Estate Investment Trusts (REITs), with 26 listings for a total of RMB 55.2 billion raised. The China Securities Regulatory Commission (CSRC) expanded its REIT programme back in 2023 with the inclusion of consumer-related infrastructure projects, easing funding for commercial property landlords and broadening investment options. Eight of the top ten listings during 2024 were REITs with a focus on malls, department stores and infrastructure. Additionally, the upcoming inclusion of REITs into the Stock Connect programme is expected to further enhance market liquidity and attractiveness of REITs.

Irene Chu, Partner, Head of New Economy & Life Sciences, Hong Kong, KPMG China, says:

A-share IPO activity is expected to remain stable as Chinese Mainland shifts its focus to strengthening the quality of listed companies, aiming to improve the overall capital market. Chinese enterprises looking to go public may shift their attention to Hong Kong, which continues to offer strong connectivity to the A-share market through the Stock Connect programme and provide valuable access to global investors through its position as an international financial centre.

In Hong Kong, IPO applicants remained cautious in the first half of 2024 due to high interest rates and slowing global economic growth, resulting in HKD 13.4 billion raised from 30 IPOs. The second half showed a significant recovery, with HKD 69.5 billion raised across 33 deals, accounting for over 80% of the full-year proceeds. This recovery was driven by the listing of several sizeable deals, including four of the 10 largest IPOs in the past three years. In total, Hong Kong raised HKD 82.9 billion across 63 deals, marking a 78% increase in funds raised compared to 2023.

Earlier in the year, Hong Kong saw the listing of its first two Specialist Technology Companies under Chapter 18C. These companies, primarily engaged in AI and robotics, diversify Hong Kong’s portfolio and reinforce its position as a hub for innovation. Additionally, the city completed its inaugural De-SPAC transaction, resulting in the listing of a Southeast Asian digital solutions platform. These milestones, alongside temporary adjustments to the listing requirements for Chapter 18C and SPAC, highlight Hong Kong’s growing inclusivity and its strength as an international financial centre.

Hong Kong also celebrated the 10th anniversary of the Stock Connect programme last month, which has now grown to include bonds, ETFs, and interest rate swaps. ETFs were particularly successful this year, with significant increases in new ETF listings as well as record highs in daily average turnover. On the other hand, two ETFs tracking Hong Kong equities were listed on the Saudi Exchange in 2024, marking a significant milestone in capital market connectivity between Hong Kong and the Middle East.

Louis Lau, Partner, Head of Hong Kong Capital Markets Group, KPMG China, says:

With positive momentum and increasing investor confidence in the Hong Kong IPO market, the city is becoming an increasingly attractive option for IPO applicants. CSRC’s measures to encourage leading Chinese enterprises to list in Hong Kong and Chinese Mainland’s plan to adopt a more relaxed monetary policy in the coming year will continue to bolster the city’s IPO pipeline, while the inclusion of additional Middle Eastern stock exchanges as Recognised Stock Exchanges is expected to drive secondary listings from the region. Consequently, we anticipate a steady stream of sizeable IPOs in 2025.

-Ends-

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