Hong Kong's average IPO size shrunk 10% in the first half of the year

There were, however, double the number of listings as small to medium sized companies rushed to list.

Despite a series of listings from small and medium sized companies that buoyed the number of listings by 50%, Hong Kong’s average deal size shrunk 10% from $1.1b in the first half of 2017 to $1b in January to June 2018, according to accounting firm PwC.

This led to the total funds raised by IPOs to contract 8% YoY from $54.9b in H1 2017 to $50.4b on H1 2018.

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There were a total of 108 listings in H1 2018, with 48 on the Main Board and 50 on the GEM. There were 7 who switched from GEM without raising any funds and 3 who listed by introduction on the Main Board without funds raised.

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Industrial products accounted for the lion’s share (36%) of new listings in the Main Board followed by retail, consumer goods & services (35%) and financial services (14%).

Despite the dismal half-year showing, analysts are of the same mind that the Hong Kong IPO scene is poised to have a record-breaking year with PwC suggesting that the local bourse may soon reclaim the IPO crown from incumbents Nasdaq and New York as widespread market reforms kick into effect and a series of at least 15 more blockbuster deals including Xiaomi and China Tower take place. 

Also read: Hong Kong can expect at least 15 more blockbuster IPOs in the second half of the year

“We predict 220 IPOs in 2018, including several large-scale IPOs on the Main Board and 90 on the GEM Board, with an estimated total funds to be raised between $200 - 250 billion. That level of activity will not only set a new record on the number of IPO cases, but also increase the possibility of Hong Kong reclaiming its top spot in the market with the most funds raised globally,” said Benson Wong, entrepreneur group leader at PwC Hong Kong.

Wong also notes the recent agreement between bourse operator HKEX and China’s National Equities Exchange and Quotations (NEEQ) which opens the door for NEEQ-listed firms to float in the SAR under a dual-listing model, paving the way for more Chinese tech giants and new economy companies to the Hong Kong bourse.