A leading accounting firm yesterday predicted that the funds raised via initial public offerings will reach HK$200 billion (US$25.64 billion) in 2006 in the Hong Kong market.
A report by Pricewater-houseCoopers said 2005 is a recordbreaking year for IPO business in Hong Kong in terms of total capital raised, which is around 45 percent higher than the previous record in 2000 of US$16.92 billion.
"Despite uncertainties on interest rates and oil prices during 2005, about 70 companies would be listed on the main board and the Growth Enterprise Market this year and funds raised could reach HK$192 billion," said Edmond Chan, partner at the firm's Capital Markets Services Group.
"These results were contributed by the return of investors' interests on the equity market towards the end of 2005, and fund raising by large stateowned enterprises," Chan added.
"In 2005, the 70 IPOs raised US$24.61 billion out of which 80 percent were raised by Chinese mainland enterprises," said Chan. "These figures clearly indicated that Hong Kong has succeeded in establishing its position as the primary international capital raising platform for the Chinese mainland."
Richard Sun, another partner at the firm, said the Hong Kong IPO market "will continue to be fueled by the Chinese mainland's booming economy and appetite for funds. We expect to see sizable and quality listings in 2006. There is a strong pipeline of companies with strong finances, including mainland-based financial services companies and logistics companies that are ready to come to the market."
Taking into account the robust outlook on the mainland's thriving economy, the firm expects the amount of IPO funds raised in 2006 at a record high of US$25.64 billion.