Hong Kong drops to 7th spot on global IPO venue ranking as fundraising plunges 52 per cent in first quarter: Refinitiv

Hong Kong has dropped to the seventh spot on a league table of global Initial Public Offerings (IPOs) for the first quarter of 2020, according to financial data provider Refinitiv.

Fundraising from IPOs in the city plunged by 52 per cent year-on-year to US$3.9 billion in the first three months, Refinitiv said, as the coronavirus crisis hammered global equity markets.

The dismal performance saw Hong Kong overtaken by Malaysia, which had US$4.6 billion in IPOs, to take sixth place on the global table, Refinitiv said.

Total global IPO fundraising in the first quarter fell by 34 per cent year-on-year to US$37.3 billion, Refinitiv said, with the United States, China, the United Kingdom and India the top four fundraising venues.

The performance of Hong Kong, which was the third biggest IPO venue in 2019, was particularly hit by the collapse in the Hang Seng Index from its peak in January.

The first quarter saw the volume of IPOs in Hong Kong plunge by 54 per cent to 54 deals, Refinitiv said. The average deal size was down by 22 per cent year-on-year to US$72.6 million.

The drop in IPOs and fundraising was caused partly by the outbreak of the coronavirus, which forced many companies to shelve their listing plans.

The number of shelved IPOs in the first quarter rose to 25, the highest number since Refinitiv began tracking the data in 2009.

“The Covid-19 pandemic has impacted the IPO market significantly, with a number of companies withdrawing their listing plans due to the increased volatility and uncertainty in the markets,” said Kenrick Leung, head of equity capital markets for Greater China at Refinitiv.

Leung added that despite the gloomy figures, he expects the IPO market to recover in the second half of the year, citing the successful listings of JD Health and Pinduoduo in China in the first quarter.

“We are also seeing some companies accelerate their listing plans in the second quarter, which will lend support to the market,” he said.