Hong Kong’s initial public offering ( IPO ) market is on course to restore its top-five global ranking in 2024 despite the volume of deals being down from that of 2023, according to a recent report.

Ranked sixth last year, Hong Kong will be listed as the fourth-largest IPO market in 2024, according to the latest KPMG report, with its new position driven predominantly by China Securities Regulatory Commission initiatives encouraging Chinese corporates to list in Hong Kong.

In addition, strengthened ties between Hong Kong and the Middle East will potentially encourage secondary listings from the region.

Hong Kong recorded 63 IPO deals, as of December 8, seven less than in 2023. While the first six months witnessed lukewarm IPO activities due to cautiousness stemming from the macroeconomic environment, the market picked up momentum in the second half of the year, seeing HK$69.5 billion ( US$8.9 billion ) raised from 33 deals.

Capital raised during the second half of 2024 is four times more that of the first half, bringing the total amount raised to almost HK$83 billion, up approximately 80% year on year.

“IPO funds raised in the second half [of the year] increased significantly when compared with the first half, largely due to the listing of several mega-sized IPOs, generating significant momentum for the Hong Kong IPO market,” notes Louis Lau, KPMG China’s head of Hong Kong capital markets group.

“At the same time, an uptick in over-subscription numbers for IPOs in the second half of 2024 signifies growing confidence and an increasing appetite for Hong Kong IPOs,” Lau adds. “These events have occurred despite a relatively slow economy, and are expected to greatly boost the Hong Kong IPO market for the coming year.”

The consumer market captured a notable share in the IPO market, yielding the largest IPO deal of the year – Midea’s HK$35.7 billion IPO – and representing four out of the top 10 largest IPO deals in Hong Kong.

Nonetheless, Lau expects the technology, media and telecom ( TMT ) and life science sectors to lead the IPO market in the coming year, given that they historically account for half of the active applicants.

Outside Hong Kong

The global IPO market, which has declined for three consecutive years, recorded 1,159 deals, totalling US$119 billion in 2024. Both the volume and value of global IPOs fell more than 10%.

The total of funds poured into the Asia-Pacific IPO market in 2024 were half those of 2023, representing the worst decline when compared with the Americas and the Europe, Middle East and Africa ( EMEA ) regions.

The A-share IPO market, battered by tough economic times, saw merely 119.1 billion yuan ( US$16.39 billion ) worth of funds raised and 125 IPOs completed, marking a 70% and 60% yearly decline, respectively. The average deal size has been reduced to 960 million yuan, down 20% from 2023.

Despite the A-share market’s weak performance, KPMG expects a correction as more A-share companies look to strengthen their quality with an eye to eventually listing in Hong Kong, a process that is seen as  eventually benefiting the Hong Kong IPO market with more listings.