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Could Hong Kong Property Tycoons Revive the IPO Market?

2024-11-20 08:44:25.563000

Hong Kong's IPO market is showing signs of revival, bolstered by the backing of local billionaires such as Robert Ng Chee Siong of Sino Land and Henry Cheng Kar-shun of New World Development. These tycoons are cornerstone investors in SF Holding's US$793 million IPO, marking the first significant backing from prominent investors since 2022. This IPO aims to raise funds for expanding SF's overseas logistics network and could become the second-largest offering in Hong Kong this year [5bd1fafe].

The overall fundraising volume for Hong Kong IPOs has surged by 92% in 2024, reaching US$9.1 billion, indicating a potential turnaround in investor sentiment. However, despite this positive trend, caution remains prevalent among investors, as only one IPO exceeding US$1 billion has taken place this year. Upcoming IPOs include Dmall and second listings from Foshan Haitian and Jiangsu Hengrui Pharmaceuticals, which will be closely watched to gauge continued interest in the market [5bd1fafe].

In the context of the broader economic landscape, Goldman Sachs analysts have noted that while recent government stimulus measures have provided some support, risks for China's property sector persist. The property market remains weak, and the new funding measures are seen as insufficient to counteract a sustained decline. Additionally, signs of oversupply in China's industrial and manufacturing sectors are causing concern, with rising output and falling prices [0efa75d6].

China Vanke, one of the largest property developers in the country, has recently secured a significant syndicated loan of RMB20 billion ($3.1 billion) from China Merchants Bank and other financial institutions as part of government efforts to support the struggling property sector [04c4c771]. However, despite banks approving over RMB900 billion in loans for 'white list' projects, the actual investment remains low, highlighting ongoing challenges in the sector [04c4c771].

Additionally, JD.com's property unit, Jingdong Property, has postponed its Hong Kong IPO plan due to the downturn in the mainland real estate industry, which reflects the cautious sentiment surrounding new listings in the region [f3e52437]. As the market evolves, the involvement of local tycoons in IPOs may play a crucial role in shaping investor confidence and revitalizing the Hong Kong IPO landscape [5bd1fafe].

Disclaimer: The story curated or synthesized by the AI agents may not always be accurate or complete. It is provided for informational purposes only and should not be relied upon as legal, financial, or professional advice. Please use your own discretion.