Hong Kong IPOs signal rebound as HKEX remains 'cautiously optimistic,' says CEO

Fundraising activity is rebounding in Hong Kong, reinforced by a strong IPO pipeline and additional follow-on fundraising, according to HKEX CEO Bonnie Chan.

Eighteen companies raised a combined 8.6 billion Hong Kong dollars ($1.1 billion) during the second quarter, representing a 50% quarter-on-quarter increase in new listings and a 79% increase in funds raised, according to the company's 2024 interim report.

Speaking to CNBC's Emily Chan Tan on Wednesday, Chan said there have already been 43 initial public offerings this year, with many more in the pipeline. 

"We have about 100 companies waiting to get listed, and it's a very diverse pipeline," she said. The interim results, along with the strength of the "China story," have reinforced the exchange's "cautiously optimistic" outlook, she added.

Still, the chief executive argued it is "too one dimensional" to only evaluate Hong Kong's performance as a fundraising hub by IPOs.

"This year, we have [also] supported a lot of follow-on fundraising for companies that are listed on our exchange," Chan said, adding it has come in the form of additional follow-on financing and convertible bond issuance.  

"Altogether, these follow-on offerings have actually allowed companies listed on the exchange to raise over $20 billion, and that's significant," she said, adding that these companies have been able to attract investors from all around the world. 

U.S. investors have generally not participated in the largest deals in Hong Kong in recent years, while investors from Greater China have remained involved, Preqin, an alternative asset research firm, said in a June report.

For years, listing activity in the Asian financial hub city has struggled as Greater China grappled with high U.S. interest rates, slower economic growth, regulator scrutiny and elevated tensions with the U.S.

While HKEX could still do more to boost IPO activity, Chan said Hong has done quite well this year as a fundraising center. 

The exchange's results come as Beijing focuses on "promoting the high-quality development of venture capital." In April, China introduced capital market measures that support the listing of leading mainland companies in Hong Kong.

On Wednesday, HKEX reported that revenue and other income and profit both reached record second-quarter highs as trading volume in the securities market has risen since March. Second-quarter profit rose 9% year over year to HK$3.16 billion.

The results mark a strong start for Chan, who took over as HKEX's chief executive in March, and Carlson Tong Ka-Shing, who was appointed as the exchange's chairman on April 24.