Funds raised via initial public offerings in Hong Kong this year have reached the lowest level in two decades, according to an EY report.
As of November 17, IPOs in Hong Kong raised a total of HK$41.3 billion ($5.3 billion), according to an EY report, down 59 percent year-on-year. This is the lowest amount raised since 2003, when Hong Kong faced various challenges including the SARS virus outbreak.
The number of firms that listed fell 19 percent to 61 with Chinese liquor distiller ZJLD Group marking the largest IPO with around HK$5.3 billion raised in April.
Poor market sentiment and weak post-IPO performance have led some high-profile companies to change their listing plans.
Government Efforts
According to the report, Hong Kong authorities must further their efforts to support a market recovery by enhancing liquidity and luring foreign capital. One major initiative underway is the launch of the Fast Interface for New Issuance ( FINI) platform which will shorten and digitalize settlement processes.
The downturn in Hong Kong is in line with global IPO activity which saw funds raised and the number of deals decrease by 35 percent and 12 percent, respectively.
