Hong Kong And Shanghai Exchanges Raise 90% Of Greater China IPO Funds

by Mary Swire, Tax-News.com, Hong Kong

28 May 2004

According to a survey by accounting firm PricewaterhouseCoopers, around 90% of the total IPO (initial public offerings) funds raised in China originate from the stock exchanges of Hong Kong and Shanghai.

When comparing stock exchanges within Greater China, the survey shows that the Hong Kong Stock Exchange had the most IPO activity in terms of number of IPOs (278) in the last three years, followed by Shanghai (215), Taiwan (199) and Shenzhen (1).

In addition, the PwC Greater China IPO Survey report, which measured the years 2001 through to 2003, found that the average size of Chinese initial public offerings was 67% larger in 2003 compared to 2001.

The survey also found that whilst the total amount of new capital raised through IPOs in the United States and New York has seen a steady downward trend in the last three years, the Greater China market has seen year on year growth of 27%, from US$10.62 billion in 2001 to US$13.51 billion in 2002.

Furthermore, growth in the Chinese market means that funds raised in Greater China in 2003 (US$13.93 billion) were only 27% behind the US market (US$17.67 billion) and have surpassed funds raised in Europe in 2002 and 2003, the survey found.

Richard Sun, a partner in the Capital Market Services Group of PricewaterhouseCoopers, observed: "Over the last three years, the capital markets in the Greater China region were affected by negative external factors such as 9/11 and SARS. However, we saw a quick recovery in the latter part of 2003."

Meanwhile, Edmond Chan, also a partner in the Capital Market Services Group of PricewaterhouseCoopers, noted: "It is encouraging to see that the Hong Kong Stock Exchange remains the international fund-raising platform for PRC enterprises, while the Shanghai Stock Exchange serves as the principal fund-raising platform in Mainland China.”

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