The secondary listings of Chinese firms booted from American bourses will help Hong Kong’s IPO markets maintain momentum in 2021 and fundraising value, according to a KPMG report.
Despite an economically crippling pandemic, fundraising on Hong Kong’s stock exchange grew 24 percent annually and reached a 10-year high in 2020 140 firms raising $50 billion, according to data compiled by KPMG, which included confirmed listings up until December 1.
Hong Kong ranks second only behind New York’s Nasdaq with 175 firms raising $52.3 billion, according to Refinitv data.
2021: Repeat Year
KPMG projects that in 2021, 130-150 firms could go public and rise between HK$450 billion and HK$5400 billion ($51.6 billion), reaching similar levels as 2020.
The ‘Big Four’ firm cites increased secondary listings from firms already public in the U.S. as a major driver of fundraising in Hong Kong
U.S. Delistings
More than just an additional funding channel, there are increasing headwinds for Chinese firms in the U.S. that face the legislative force of the White House, most recently the likely signing of a new bill that will require all listed companies to face consistent auditing standards. Though Beijing has signaled reconciliatory desires to comply, it has also cited national security concerns with regards to disclosure.
In addition, Washington has also already passed a ban on investments on entities linked to the Chinese military, a move that has resulted in the removal of some shares from major indices by S&P DJI, FTSE Russell and Nasdaq.
