Hong Kong IPO pipeline remains strong despite Chinese crackdown (HKEX) – .

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Hong Kong IPO pipeline remains strong despite Chinese crackdown (HKEX) – .


Hong Kong’s pipeline for initial public offerings remains strong – although there is more caution at the moment given China’s increased regulatory scrutiny, the chief executive of the Hong Kong Exchange and Clearing.
“In the short term, obviously … this move will encourage some potential issuers to be a little more careful and try to see when it is the right time to go to market,” Nicolas Aguzin told CNBC’s Emily Tan on Wednesday.

Hong Kong markets entered a free fall at the end of July after China tightened rules on the private education sector as part of a wider trend of increasing regulation in sectors such as technology and education. carpooling.

Shares of gaming giant Tencent fell 10% last week following a Chinese state media article calling online games “opium,” urging the industry to prevent addiction among consumers. children.

“When you have volatility, it’s usually a little less likely that people want to rush into the market,” Aguzin said. “But in the long term, right now we’re looking at the pipeline, there are over 200 companies… with their files on file. “

A record 46 companies listed in Hong Kong in the first half of 2021. Total funds raised amounted to 211.7 billion Hong Kong dollars ($ 27.2 billion) from January to June of this year, up 128% compared to the same period in 2020.

Hong Kong ranks third globally in terms of IPO funds raised for the first half of 2021, HKEX said in its interim results.

HKEX benefits

Hong Kong Exchange and Clearing on Wednesday reported record earnings and profits for the first six months of the year.
He was motivated by “a dynamic IPO market, high transaction volumes and significant momentum from Stock Connect,” Aguzin said in a statement.

Stock Connect programs allow mainland investors to trade certain stocks in Hong Kong, known as southbound securities. The program also allows foreign investors to trade certain stocks listed in Shanghai and Shenzhen, known as North Trade.

Transaction volumes under Stock Connect reached new highs, with an average daily turnover of 114.4 billion Chinese yuan ($ 17.6 billion) for northbound flows, an increase of 54% compared to the first half of 2020.

Southbound flows had an average daily revenue of $ 48.1 billion, up 132% from the same period last year, according to the earnings report.

“Our main strategic and competitive advantage is to be anchored in China and connected to China,” said Aguzin.

“We have a lot of our results that have some connectivity with China. We think it’s great, it will continue to attract international investors, ”he told CNBC.

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