Chinese companies are taking the lead as China has become the biggest initial public offering market in the world in terms of amount of funds raised and the number of deals made, based on a report by accounting firm Ernst & Young.
Hong Kong is the natural choice for most mainland companies opting for a stock listing while small and high-growth information technology companies tend to opt for a listing in the United States. “China will maintain its lead in the IPO market as more mainland companies tap overseas capital pools even as they expand their business locally,” said Terence Ho, strategic growth markets and China IPO leader at Ernst & Young.
In the past decade, China’s companies were able to attract US$188 billion worth of investments spread out in 495 deals offered on the New York Stock Exchange, Nasdaq Stock Market, London Stock Exchange and Hong Kong Stock Exchange.
China is followed by Russia in terms of size with $39.1 billion worth of funding raised from 39 overseas IPOs during the same period.
Multinational firms with overseas headquarters but businesses in the Chinese mainland are also considering listing in the country to tap into domestic wealth when the Shanghai Stock Exchange allows foreign companies to list.
Currently, 175 mainland companies have been able to raise US$32.1 billion on local and overseas floats during the first six months of the year.
The report also reflects the growing importance of Brazil, Russia, India and China; combined they comprise 68 percent of total funds raised in the last 10 years.