The global IPO market demonstrated resilience, headlined by the rise of Shanghai’s bourse to the top rank based on funds raised.
Globally, funds raised increased by 54 percent despite ongoing market uncertainties with strong contributions from the A-share market which is expected to complete 53 new listings that will raise 80.6 billion yuan ($11.4 billion), a stunning 217 percent increase. This was due in large part to the $9.9 billion raised at the Shanghai Stock Exchange, compared to $4.4 billion last year, which led its claim to the quarterly top spot.
The remaining players in the first quarter’s top five are Nasdaq ($5.5 billion) at second followed by the New York Stock Exchange ($3 billion), the Stock Exchange of Thailand ($2.4 billion) and the Hong Kong Stock Exchange ($1.8 billion).
STAR Power
In addition to a sizable listing of a high-speed railways company, Shanghai saw strong demand in its tech board «STAR Market» which raised 29.4 billion yuan ($4.2 billion) or 32 percent of total A-share funds raised.
«The STAR Market reached multiple milestones in the first quarter, including having certain pre-profit entities and the first companies with [weighted voting rights] and red-chip structures to list,» said Louis Lau, partner, capital markets advisory group at KPMG China, in the firm’s quarterly report. «The STAR Market’s accommodation of a greater range of companies signals its commitment to support the development of innovative companies in mainland China.»
Unfavorable Outlook
Other notable IPO successes include healthcare, life sciences and technology especially in light of the urgent need to diagnose, treat and support patients hit by the coronavirus. But the IPO outlook remains uncertain and further dented by a sharp increase in cases in the U.S. and Europe.
«The speed of an economic turnaround will depend on various factors, including an effective handling of the Covid-19 outbreak and its financial impact as well as continuing progress in addressing other global economic uncertainties,» added KPMG China’s partner and head of capital markets Paul Lau.
