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The world's capital market was very active in 2006. There was substantial growth in market capitalisation and trading activities in most of the major markets.
The performance of the Greater China capital market was particularly outstanding in 2006. The total funds raised from IPOs reached a record high level of USD62 billion and for the first time this exceeded the aggregate amount of USD48 billion raised from IPOs in the United States (New York Stock Exchange, NASDAQ and American Stock and Options Exchange) and the aggregate amount of USD39 billion raised from IPOs in the United Kingdom (London Main Board and AIM), excluding investment companies. This achievement was partly due to the IPOs of two Mainland China banks which together raised USD36 billion on the Hong Kong Stock Exchange and the Shanghai Stock Exchange. These IPOs ranked number one and number five, respectively, in terms of the largest amount of IPO funds raised in world history.
In 2006, there were a total of 140 IPOs in Greater China. The average deal size was USD0.44 billion, up from USD0.26 billion in 2005. This was higher than the average deal size of USD0.22 billion in the United States and USD0.13 billion in the United Kingdom. Additionally, there was generally an increase in pricing, in terms of the Price Earnings multiple (P/E) of IPOs across the Greater China capital market.
The aggregate market capitalisation in the Greater China capital market at the end of 2006 amounted to USD3,455 billion, an increase of 79% when compared with the end of 2005. The 2006 annual trading value in Greater China nearly doubled to USD2,969 billion. There was a constant inflow of funds from overseas for investing in shares listed on the Hong Kong Stock Exchange to apply for new shares offered under IPOs.
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