Market Insights Financial Corporate Finance

Initial Public Offerings - Hong Kong

Hong Kong

The Initial Public Offerings market (IPO) market in Hong Kong is poised to witness significant growth in the coming years.
By 2024, the transaction value in this market is projected to reach a staggering HK US$0.47bn.
This represents an annual growth rate of 72.34%, resulting in a total projected amount of HK US$0.47bn by 2024.
In 2024, the average transaction value in the IPO market is expected to be HK US$37.61m.
When compared globally, it is worth noting that in China leads the pack with the highest transaction value, reaching an impressive HK US$63,330.00m in the same year.
Hong Kong's IPO market continues to thrive, attracting a diverse range of companies seeking to tap into the city's robust financial ecosystem.

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Analyst Opinion

The Initial Public Offerings market in Hong Kong is experiencing significant growth and development.

Customer preferences: Investors in Hong Kong show a strong preference for IPOs from sectors such as technology, healthcare, and biotech. These sectors are perceived as having high growth potential and are often favored by both institutional and retail investors.

Trends in the market: One notable trend in the Hong Kong IPO market is the increasing number of Chinese companies choosing to list on the Hong Kong Stock Exchange. This trend can be attributed to various factors such as the political climate, regulatory environment, and access to international investors. Additionally, there is a growing interest in Special Purpose Acquisition Companies (SPACs) as a vehicle for companies to go public in Hong Kong.

Local special circumstances: Hong Kong's status as a global financial hub and its proximity to mainland China make it an attractive destination for companies looking to raise capital through IPOs. The city's well-established legal system, financial infrastructure, and investor base contribute to its appeal as a listing venue. Furthermore, Hong Kong's unique position as a gateway between East and West allows companies to access a diverse range of investors.

Underlying macroeconomic factors: The economic stability and growth in Hong Kong play a crucial role in the development of the IPO market. Factors such as low interest rates, strong liquidity, and government support for the financial sector create a favorable environment for companies considering going public. Additionally, Hong Kong's strategic location within the Asia-Pacific region positions it as a key player in the global capital markets, attracting companies seeking international exposure and capital.

Methodology

Data coverage:

Figures are based on the revenue generated by the Investment Banking market, as well as the transaction value, the number of transactions, and the average transactions size of the Mergers and Acquisitions (M&As) and Initial Public Offerings (IPOs) markets.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach and are based on a specific rationale for each market. As a basis for evaluating markets, we use market research and analysis, as well as data from annual financial reports. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus, such as GDP, wealth per capita, and total investment (% of GDP). This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita and total investment (% of GDP).

Additional Notes:

The market is updated twice per year in the event that market dynamics change.