Hong Kong expected to return to global Top 5 in new IPOs in 2024: report

Hong Kong's IPO market is expected to rebound in 2024, allowing the city to reclaim its position as one of the top five global IPO sites, a report by accounting firm KPMG said.

The report projected up to 90 IPOs in Hong Kong this year, which will raise HK$100 billion (US$12.8 billion), including companies increasing connectivity with the Middle East, spin-off listings, and new technologies such as artificial intelligence and semiconductor chips, the South China Morning Post reported on Wednesday.

"With investors shifting their attention towards technologies such as AI, semiconductors and green technology, Hong Kong is well positioned to spark a recovery in its IPO activity by embracing these growing trends," Irene Chu, Partner, Head of New Economy and Life Sciences, Hong Kong, KPMG China, was quoted as saying in KPMG's report.

Hong Kong's IPO market concluded 2023 with 70 IPOs, raising a total of HK$46.3 billion, declining 21 percent and 56 percent, respectively, as compared to 2022, showed the report. However, consumption companies remained a bright spot for Hong Kong, recording the largest IPO in terms of proceeds for two consecutive years.

In 2023, Hong Kong ushered in a suite of strategic listing reforms. The introduction of Chapter 18C, its main board listing rule, boosts the city's attractiveness to a wide range of special technology companies.

Listing reforms on GEM, the second board of the Hong Kong stock exchange, will enhance GEM's attractiveness for high-growth, high quality start-ups and smaller firms across the Guangdong-Hong Kong-Macao Greater Bay Area, providing an important alternative source of funding, it said.

Hong Kong is home to Asia's first-ever Saudi Arabia exchange-traded fund, as the city further strengthens its cooperation with the Middle East. Hong Kong is expected to continue encouraging interconnectivity with countries in the Middle East, which could lead to greater interest in the city's capital market or potentially cross-border listings of Middle Eastern companies in Hong Kong. These developments will further fortify Hong Kong's position as one of the premier international financial centers in the world, the report noted.