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Hong Kong’s IPO Market Languishes Amid Private Sector Economic Concerns

Hong Kong’s initial public offerings (IPOs) on the Stock Exchange have continued to lose momentum, primarily due to apprehensions within the private sector concerning the economic outlook.

Irene Chu, an analyst at KPMG China, conveyed that the revival of Hong Kong’s IPO market is progressing more slowly than initially anticipated. During the first three quarters of 2023, the Hong Kong market witnessed 44 IPOs and generated 24.6 billion Hong Kong dollars, approximately equivalent to 3.14 billion USD. This translated to a 65% drop in the number of IPOs and a 15% decline in fundraising in comparison to the corresponding period in 2022.

The challenges in Hong Kong’s IPO market are rooted in its lackluster performance in the prior year. In 2022, the Hang Seng Index recorded a 15% decrease, marking the third consecutive year of decline. The bleak trend persisted into October this year, with the Hang Seng Index reaching its lowest level since November 2022.

Ringo Choi, Head of IPO for EY Asia Pacific, pointed out, “The Hong Kong stock market’s performance pales in comparison to the active trading seen in 2020. The persisting lack of confidence indicates that the IPO market’s recovery will not occur as swiftly as previously anticipated.”

Both EY and KPMG China had earlier predicted that Hong Kong’s IPO market might rebound during the second half of 2023. Nevertheless, the ongoing sluggishness reveals that the path to recovery remains uncertain as economic concerns weigh heavily on the private sector and the broader market.

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