Zhang Yu

JeniZhang13@163.com

INITIAL public offerings (IPOs) on the Shanghai and Shenzhen stock exchanges are set to slow in the first half of 2019, but are expected to stabilize and recover in the second half of the year, said accounting firm PwC.

As it released data reviewing the domestic IPO market in 2018 and projecting the outlook for 2019 Wednesday, PwC expected a sharp drop in the number of IPOs and value raised from the stock market this year.

In 2018, the number of IPOs in the Shanghai and Shenzhen stock markets reached 105, down 76 percent compared with 436 in 2017. In terms of value, firms raised 136.8 billion yuan (US$19.88 billion) in 2018, 40 percent lower than the 230.4 billion yuan raised a year ago.

“We predict the A-share market will remain in a cautious mood during the first half of 2019, but will stabilize in the second half due to marginal improvements in bearish situations,” said Frank Lyn, PwC’s mainland and Hong Kong markets leader.

As many as 130 to 150 firms are expected to launch initial public offerings this year, with deal sizes set to reach 100 to 120 billion yuan in 2019, according to PwC’s report.

Companies from the Chinese mainland drove a bumper year for Hong Kong IPOs in 2018, helping the city regain its much-coveted title as the world’s leading venue for going public.

A total of 218 companies raised a total of HK$286.5 billion (US$36.56 billion) in Hong Kong listings last year, well ahead of the New York Stock Exchange’s US$28.9 billion and a 123 percent increase year on year.

PwC predicts 200 IPOs in Hong Kong this year, including 60 on the growth enterprise market and one to two mega-sized IPOs on the main board, with an estimated total fund to be raised between HK$200 billion to HK$220 billion.