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Despite a number of regional and global events and the substantial changes in regulatory environment that affected the capital markets in the Greater China region, we have seen that the money raised and the average deal size of IPOs in the region have increased year on year since 2001, fuelled by China's economic growth. New money raised from the capital markets in the Greater China region increased from USD10.62 billion in 2001 to USD25.57 billion in 2005, while average deal size has increased from USD45 million per deal in 2001 to USD260 million per deal in 2005.
For the first time, the average deal size for capital markets in the Greater China region (USD 260 million) surpassed the average deal size of the US markets (USD170 million) and the European markets (USD100 million) in 2005. Such an achievement was attributed to the initial public offering of China Construction Bank, the world's largest since 2001, on the Hong Kong stock market. The decision of the bank to make a debut in Hong Kong rather than going for a dual listing in both Hong Kong and the US has a longer term implication: Hong Kong is the preferred fund raising platform for Chinese enterprises. It pointed to the fact that Hong Kong has been very successful in performing its role as the primary international capital formation centre for China. Hong Kong does have an ingredient for success by virtue of its irreplaceable role as an investment gateway to Mainland China for international investors, as well as an efficient market for supply to meet the capital needs of Mainland companies. Mainland enterprises probably would not need to go to the US and European stock markets for IPOs in the future, considered that the Hong Kong stock market has grown in sophistication and maturity comparable to that of the US and European exchanges.
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Read more by downloading our Greater China IPO Watch (Review of the years 2003 to 2005) (pdf file, 337KB) for your reference. |
