HK leads IPO race for second year

09:03, December 13, 2010      

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Hong Kong is set to claim top spot as the world's hottest IPO market this year, raising over $51 billion, but observers say the city's bourse must shrink its reliance on the mainland.

The financial hub was far outpacing New York, Shenzhen and Shanghai by early December, according to figures from Dealogic, the second year in a row that Hong Kong has led the world in initial public offerings.

New York's $31.39 billion fundraising bid was a shadow of Hong Kong's eye-watering total, with Shenzhen and Shanghai trailing behind Wall Street, Dealogic said.

"It's definitely an achievement - Hong Kong can claim to be both an international financial center and a gateway to the Chinesemainland," said Liu Qiao, an associate business professor at Hong Kong University.

"It's a very good platform for Chinese companies to tap international capital, something that would be hard for Shanghai to catch in the short term."

But Hong Kong's windfall in 2010 - eclipsing the $30 billion it raised last year - was largely due to monster share sales by Asian insurer AIA in November and Agricultural Bank of China this summer.

AgBank set a world IPO record at the time by raising $22.1 billion, while AIA garnered $20.5 from its share sale.

"Now, all the major banks in China have listed. The only thing left are the electricity utilities and maybe the railways," said Francis Lun, general manager of Hong Kong's Fulbright Securities.

"It will be difficult to occupy the crown three years running."

Hong Kong's rise in recent years can largely be traced to Beijing's wide-scale move to privatize State-owned firms.

Source: Global Times
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