Global funds fuel Hong Kong IPO rebound as investors rebalance China portfolios: HKEX

Hong Kong initial public offerings (IPOs) are attracting strong international demand as global funds rebuild their exposure to China after years of underinvestment, according to Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing.

The Hong Kong stock exchange was seeing “very good momentum on both the supply and demand sides” for IPOs, Chan told a panel discussion at the HSBC Global Investment Summit on Wednesday.

On the “cornerstone front”, last year saw “a very strong pickup by international investors” with orders from North America, Europe and the rest of Asia, she said. “The world has realised that they are underinvested in China.”

Companies tapping international capital through Hong Kong this year have also drawn substantial overseas interest. These included Muyuan Foods, China’s largest pig breeder, which raised HK$10.7 billion (US$1.36 billion), with cornerstone investors such as Thailand’s Charoen Pokphand Foods and Singapore’s Wilmar International accounting for about half of the deal.

Biren Technology, mainland China’s first graphics processing unit developer to list in the city, raised HK$5.58 billion, backed by cornerstone investors including UBS, Eastspring Investments and Lion Global Investors.

In a separate blog post published on Wednesday, Chan described Hong Kong’s markets as “building bridges and connecting Asia’s capital markets”. She said the city was uniquely placed to “connect international capital with opportunities in mainland China and across Asia”.