As per the report of the chief investment officer of a Chinese financial services firm stated China’s IPO market will keep booming in 2021 after a blockbuster this year. This year was quite an exciting year for China’s domestic market. On Monday, William Ma of Noah Holdings (Hong Kong) said to a news channel “Squawk Box Asia” and also said that approximately out of 400 listings almost $75 billion has been raised.
William Ma of Noah Holdings, the chief investment officer at the firm also said “In terms of the IPO size and volume in the domestic China market, it has hit historical … peak in the past 10 years.”
He said, that the trends seem to continue with “huge demand” coming from both domestic and institutional investors while the companies in this new economic sector seem to go public.
According to research from EY, in 2020 the stock listing of Chinese firms have dominated the rankings. Globally, among the top 10 listings Chinese firms have made up half of the list and they took the top three spots. These include Chinese chipmaker SMIC’s listing on the STAR MARKET in Shanghai and also the e-commerce heavyweight JD.com’s secondary listing in Hong Kong. No other Asia-Pacific firm other than China yet has managed to crack the top 10. Among the Chinese firms, there was also one notable exception- financial technology giant and Alibaba-affiliate Ant group. Moreover, the firm’s highly anticipated dual-listing in Shanghai and Hong Kong was all set to be the world’s biggest initial public listing. As the company faces regulatory scrutiny, IPO was abruptly suspended in November.
EY’s Asia-Pacific IPO Leader, Ringo Choi, conveyed to the news channel that the strength of the Chinese firms in the list demonstrates the importance of the mainland’s economy and also its capability to affect stick exchange performance. Choi also mentioned, “That’s why every market is trying to attract those mainland companies or businesses to go public there.”
He said, yet the potential market returns for listing domestically are likely to be an attractive proposition for the mainland Chinese firms.
As per the EY research, it is found that the first-day return rate for IPO’s in 2020 increasing to 187% for the Shanghai Stock Exchange’s Nasdaq-style STAR Market, versus 44% for the mainboard in Shanghai. When compare to Snowflake- the largest ever software IPO and the enormous non-mainland firm that made a public debut this year it is found that it rose to 111% in its very first day of trading on the New York Stock Exchange in the month of September.