{"id":1957,"date":"2018-09-28T02:02:34","date_gmt":"2018-09-28T02:02:34","guid":{"rendered":"http:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/?p=1957"},"modified":"2018-09-28T02:02:34","modified_gmt":"2018-09-28T02:02:34","slug":"hong-kong-queue-of-ipo-hopefuls-faces-market-reckoning","status":"publish","type":"post","link":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/2018\/09\/28\/hong-kong-queue-of-ipo-hopefuls-faces-market-reckoning\/","title":{"rendered":"Hong Kong queue of IPO hopefuls faces market reckoning"},"content":{"rendered":"<div class=\"ArticleHeader_container\">\n<div class=\"ArticleHeader_upper-container\">\n<div class=\"foreground\">\n<div class=\"TwoColumnLayout_container TwoColumnLayout_fluid-left\">\n<div class=\"TwoColumnLayout_column TwoColumnLayout_left\">\n<div class=\"ArticleHeader_content-container\">\n<h1 class=\"ArticleHeader_headline\">Hong Kong queue of IPO hopefuls faces market reckoning<\/h1>\n<\/div>\n<\/div>\n<div class=\"TwoColumnLayout_column TwoColumnLayout_right\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"lower-container\">\n<div class=\"TwoColumnLayout_container inner TwoColumnLayout_fluid-left\">\n<div class=\"TwoColumnLayout_column TwoColumnLayout_left\">\n<div class=\"ArticleHeader_content-container\">\n<div class=\"BylineBar_first-container ArticleHeader_byline-bar\">\n<div class=\"BylineBar_border-wrap\">\n<div class=\"BylineBar_byline\"><a href=\"https:\/\/www.reuters.com\/journalists\/julia-fioretti\" target=\"_blank\" rel=\"noopener\">Julia Fioretti<\/a><\/div>\n<div class=\"BylineBar_last-container\">\n<p class=\"BylineBar_reading-time\">4 MIN READ<\/p>\n<div class=\"BylineBar_share-container\">\n<div class=\"SocialTool_container\">\n<ul>\n<li><\/li>\n<li><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"TwoColumnLayout_column TwoColumnLayout_right\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"TwoColumnLayout_container StandardArticle_content TwoColumnLayout_fluid-left\">\n<div class=\"TwoColumnLayout_column TwoColumnLayout_left\">\n<div class=\"StandardArticleBody_container\">\n<div class=\"StandardArticleBody_body\">\n<p>* Long queue of companies wanting to go public in Hong Kong<\/p>\n<p>* Most companies are trading below IPO price in Hong Kong<\/p>\n<p>* Asia IPO activity up 23 percent in Jan-Sept year-on-year<\/p>\n<p>By Julia Fioretti<\/p>\n<p>HONG KONG, Sept 28 (Reuters) &#8211; The number of companies filing to go public in Hong Kong has jumped almost threefold this year, driven in part by China\u2019s burgeoning technology sector, but they will have to contend with weaker markets which could hurt deals.<\/p>\n<p>Hong Kong is on track for a bumper year of initial public offerings (IPOs), spurred by a market rally late last year and listing reforms designed to attract high-growth technology and biotechnology companies.<\/p>\n<p>So far this year 214 companies have filed with the Hong Kong stock exchange, up 170 percent from last year when only 79 submitted applications, according to Thomson Reuters data.<\/p>\n<div>\n<div class=\"DPSlot_container StandardArticleBody_dp-slot-inline\">\n<p>SPONSORED<\/p>\n<div id=\"dpslot_canvas_9377723_USL8N1WC0AW\" class=\"DPSlot_ad-container\">\n<div class=\"teads-inread\">\n<div>\n<div id=\"teads1\" class=\"teads-player\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>The financial hub also overtook New York in IPO volumes, with $27.7 billion raised so far this year, the data showed.<\/p>\n<p>\u201cThere\u2019s a lot more that got started than will get finished,\u201d said Stephen Peepels, head of U.S. Securities, Asia Pacific for law firm Hogan Lovells. \u201cThere\u2019s probably not enough investor demand to take on all the IPOs that have been announced during 2018.\u201d<\/p>\n<p>The huge spike in companies wanting to go public is also due to the nature of the businesses, which tend to be younger, fast-growing and in need of cash &#8211; especially from China &#8211; marking a change from the years when the main IPOs in Hong Kong were done by Chinese state-owned enterprises.<\/p>\n<p>However bankers expect some of them could choose to raise money privately instead, putting off IPO plans as long as markets remain difficult.<\/p>\n<p>\u201cYou\u2019ll likely see some smaller transactions push out their timetable a bit,\u201d said Sunil Dhupelia, Head of Equity Syndicate, Asia ex-Japan at Credit Suisse.<\/p>\n<p>Across Asia, companies have raised $70.5 billion in IPOs in the first three quarters of 2018, up 23 percent from the same period last year and the highest since 2014.<\/p>\n<p>But performance has been patchy in Hong Kong, with some of the bigger deals still trading below their IPO price, such as smartphone maker Xiaomi, which went public in July in the world\u2019s biggest tech float in four years.<\/p>\n<p>\u201cInvesting in Hong Kong IPOs has not driven investor returns in the past 6-7 months which has contributed to the general sentiment and valuation sensitivity,\u201d said Finlay Wright, Director, Equity Capital Markets at Rothschild Global Advisory. \u201cIt feels like it would only take a few deals not succeeding to damage confidence and hit the rest of that pipeline.\u201d<\/p>\n<div><\/div>\n<h3>TRADE TENSIONS<\/h3>\n<p>Weak markets amid global trade tensions &#8211; which have hit emerging markets particularly hard &#8211; have weighed on many deals, making investors more selective.<\/p>\n<p>\u201cWhen markets are falling, many investors would choose not to participate in IPOs as the company\u2019s stock prices are more likely to fall below IPO prices once it starts trading,\u201d said Jian Shi Cortesi, portfolio manager of Asian equities for GAM investments.<\/p>\n<p>Volvo Cars and its Chinese owner Geely earlier this month postponed plans to float shares in the Swedish carmaker because of Sino-U.S. trade tensions and a downturn in automotive stocks.<\/p>\n<p>However companies from the region are still lining up to go public &#8211; from Chinese movie ticketing app Maoyan Weying to Tencent Music, the music streaming company owned by Chinese tech giant Tencent Holdings.<\/p>\n<p>Last week, Chinese online food delivery-to-ticketing services firm Meituan Dianping gained about 5 percent on its Hong Kong debut, sending a positive signal to other companies in the pipeline, although it was last trading below its IPO price.<\/p>\n<p>\u201cThe buy side wants access to China. They want access to the consumer,\u201d said Aaron Arth, Head of Financing Group for Asia ex-Japan at Goldman Sachs, referring to the market weakness.<\/p>\n<p>\u201cWhile some of these deals could be performing better, most investors would say over the long term, these companies will show growth and value creation.\u201d<\/p>\n<div><\/div>\n<p>Goldman topped the league table for equity raising in the region, followed by Morgan Stanley and Citigroup.<\/p>\n<div class=\"Attribution_container\">\n<div class=\"Attribution_attribution\">\n<p class=\"Attribution_content\">Reporting by Julia Fioretti; Editing by Stephen Coates<\/p>\n<\/div>\n<\/div>\n<div class=\"StandardArticleBody_trustBadgeContainer\"><span class=\"StandardArticleBody_trustBadgeTitle\">Our Standards:<\/span><span class=\"trustBadgeUrl\"><a href=\"http:\/\/thomsonreuters.com\/en\/about-us\/trust-principles.html\">The Thomson Reuters Trust Principles.<\/a><\/span><\/div>\n<\/div>\n<div>\n<div class=\"DPSlot_container StandardArticleBody_dp-slot-inline\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Hong Kong queue of IPO hopefuls faces market reckoning Julia Fioretti 4 MIN READ * Long queue of companies wanting to go public in Hong Kong * Most companies are trading below IPO price in Hong Kong * Asia IPO activity up 23 percent in Jan-Sept year-on-year By Julia Fioretti HONG KONG, Sept 28 (Reuters) &#8211; The number of companies&#8230; <a href=\"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/2018\/09\/28\/hong-kong-queue-of-ipo-hopefuls-faces-market-reckoning\/\">Read more &raquo;<\/a><\/p>\n","protected":false},"author":115,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1957","post","type-post","status-publish","format-standard","hentry","category-analysis"],"_links":{"self":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/users\/115"}],"replies":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/comments?post=1957"}],"version-history":[{"count":1,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1957\/revisions"}],"predecessor-version":[{"id":1958,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/posts\/1957\/revisions\/1958"}],"wp:attachment":[{"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/media?parent=1957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/categories?post=1957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/eastasiaandoceaniablog\/wp-json\/wp\/v2\/tags?post=1957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}