Comment: Weak economic and dragging on issuance needs China IPO activities may slow do

Source: Bloomberg

Filipe Pacheco

In the first half of this year, mainland China is still the busiest IPO place in the world, but the slowdown in economic growth is expected to drag more and more domestic distribution activities.

In the first half of the year, the IPO raised in Shanghai, Shenzhen and Beijing raised a total of 35 billion U.S. dollars, about half of the total global total in the same period.Although China topped the list of the number of issuers with the number of publishers in 176 issuers, the raised amount was 14%lower than the same period last year, and the issuance activities slowed down month by month.

As the enterprise is waiting for potential economic measures to take a look at, it has mainly caused the busy issuance demand of Chinese banks in the past two years to cool down.In Hong Kong in the traditional place of more investors in Chinese companies, the prospects of market recovery mainly depend on spin -off of science and technology giants and the listing of artificial intelligence or automotive startups.

PEIHAO HUANG, a joint director of ECM in Asia, Hong Kong (except Japan), said that if the issuance of Chinese companies will rebound, "the overall market confidence needs to improve, and investors' views on China's economic prospects are also a prerequisite.""Although the momentum seems to have slowed down, we are relatively optimistic in the second half of the year. Some good news will boost confidence. We hope that some such news will be seen in the next few months."

China's economic momentum in the second quarter has failed to increase, which has impacted domestic and overseas fundraising plans.Data from Bloomberg showed that the domestic market raised from March to June has declined every month.So far this year, the average IPO of the mainland market is US $ 183 million, and the first half of 2022 is $ 230 million.In Hong Kong, the scale of issuance since this year has not exceeded $ 700 million.

Selina Cheung, co -head of the Asian stock capital market in Hong Kong in Hong Kong, said that as the relevant Chinese issuance is expected to slow down, other regions may usher in good opportunities to attract investors seeking assets from Asia.She emphasized that Japan, South Korea, Southeast Asia, and India have performed active in the next few months.

Drew Bernstein, co -chairman of the Marcum Asia in New York, said that in the next few months, Chinese IPOs will be divided into science and technology that are sensitive and unlimited to safety and is not sensitive, as well as categories defined by China.It may be difficult, most of the IPO materials are in the domestic market."For example, AI, chip, there may be quantum computing, and it is likely to have to have an IPO in the A -share market."