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Jul 01, 2021

Hong Kong sees record IPO proceeds in first half of 2021

US and Chinese markets push global proceeds to highest level in five years

Hong Kong IPOs raised record funds in the first half of 2021 amid a global boom in listings, according to new research from KPMG.

During the first six months of the year, the city saw 46 deals, raising a total of HK$213.2 bn ($27.4 bn), finds the study. That represents a 130 percent increase on the total funds raised in the first half of 2020.

‘Under the backdrop of strong liquidity and a gradual economic recovery, investor demand and market sentiment remain solid,’ says KPMG.

Activity received a boost from major IPOs in the technology and logistics sectors. Kuaishou Technology, the video-sharing service second only to TikTok in China, raised HK$48 bn in February in the biggest listing of H1. JD Logistics, an offshoot of focused on supply chain management, generated HK$23 bn in the second-largest IPO.

The city also gained support from the trend for ‘homecoming’ listings, where companies listed in the US market add a secondary listing in Hong Kong. Baidu, the online search company, raised HK$23.9 bn when it completed such a move in March.

Overall, technology companies provided five of the top 10 listings by proceeds and 55 percent of total funds raised, reports KPMG. Strong demand for tech IPOs is set to continue into the second half of the year, adds the consultancy firm.

‘As societies gradually emerge from the global pandemic and new social norms are here to stay, the demand for innovative and people-oriented technologies that improve the quality, reliability and accessibility of products and services will be a key driver for future growth,’ comments Irene Chu, partner at KPMG China, in a statement.

‘We expect the momentum of IPO activities among the new economy sectors – including healthcare, life sciences, logistics & supply chain and fintech – will remain very strong in the coming quarters.’

Hong Kong’s record first half helped push global IPO proceeds to their highest level for five years, notes KPMG. During H1, there were more than 1,000 IPOs raising $210 bn, says the report.

Nasdaq provided the most proceeds, followed by the NYSE, with the Stock Exchange of Hong Kong in third and Shanghai Stock Exchange fourth.