Mainland bourses lead for global IPOs in first half, survey finds

Ding Yining
The top two global IPO fundraisers were the Shanghai and Shenzhen stock exchanges, with Chinese firms accounting for five of the top ten biggest listings in the first half of 2023.
Ding Yining

The Chinese mainland continued to be the key driver for global IPO activities in the first half of the year, with initial public offerings in China accounting for 28 percent of the world's total by volume and 50 percent in terms of proceeds, according to a latest EY report.

Mainland stock exchanges were the most active, with the top two global IPO fundraisers being the Shanghai Stock Exchange and the Shenzhen Stock Exchange, and Chinese companies accounted for five of the top ten biggest listings in the first half, the report showed.

The number of companies seeking to list on the A-share market was up 2 percent to 173 in the past six months, with the total proceeds down 33 percent to 210.4 billion yuan (US$29 billion).

Only one domestic company raised funds worth over 10 billion yuan with proceeds of 11.72 billion yuan while there were three mega deals in the same period last year.

The pick-up in IPO activity on the Beijing Stock Exchange, which is relevant to the overall industrial policy, especially incentives to support specialized and new enterprises, was also notable.

There were a total of 41 listings on the BSE which more than doubled from a year ago and proceeds soared 169 percent.

Globally, IPO activity saw a continued slowdown due to economic and geopolitical uncertainties. A total of 615 companies were listed and the proceeds raised amounted to US$60.9 billion, down 5 percent and 36 percent, respectively.

"In the second half, the registration scheme is expected to keep the overall listing numbers relatively stable and the upward trend would continue," said Felix Fei, EY assurance partner in China.

There's no clear sign of a drop in terms of quality and number of companies in the listing pipeline and overall upward momentum remains, he added.

The overall IPO pricing tended to be more rational, and there was a decline in fall-on-debut stocks over the same period last year.

The A-share market is expected to remain the leader in global IPO activity and the Hong Kong market could also see a pick-up from the lack of overseas companies' listing in the first half.

The newly-launched "HKD-RMB Dual Counter Model", which allows investors to trade Hong Kong stocks in renminbi, or yuan, could facilitate the use of renminbi in equity trading in Hong Kong and further support the yuan's internationalization, commented EY assurance partner Lawrence Lau.

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