IPO activity in Hong Kong is expected to rebound in 2023, despite continued impact from the ongoing pandemic, geopolitical tensions and economic uncertainty.
Hong Kong is expected to raise between HK$180 billion ($23 billion) and HK$200 billion through 100 initial public offerings (IPO) in 2023, according to PwC estimates, nearly doubling the expected fundraising amount in 2022.
Major positive drivers for the market include the expansion of the «Wealth Management Connect» cross-border scheme as well as new listing rules to attract more tech firms to raise funds in the city.
Slow 2022
Meanwhile, 2022 has been a significantly slower year for Hong Kong with IPOs raising HK$87.9 billion, as of November 30. PwC forecasts that there will be 80 IPOs by the end of the year raising a total of HK$105.6 billion – down 68 percent compared to 2021.
The slowdown was attributed to several factors, including the ongoing pandemic, geopolitical tensions and rising interest rates. While PwC anticipates the former two issues to persist, alongside economic uncertainty, a peak in interest rates coupled with «abundant funds and huge investment needs for corporate development» is expected to stabilize capital markets.
«With a stable capital market and regulatory reforms and enhancements, Hong Kong’s pipeline for IPOs remains strong. In addition, new economy enterprises [including biotechnology and specialist technology companies] will continue to be active on the Hong Kong Stock Exchange in 2023,» said Benson Wong, PwC Hong Kong’s entrepreneur group leader.
