(Yicai Global) Dec. 15 -- KPMG expects proceeds from initial public offerings in Hong Kong to drop to a three-year low mainly on a decline in listings worth over USD644 million, while market participants see the recently launched Shenzhen-Hong Kong Stock Connect having a positive effect on the IPO market.
Proceeds may decline 26 percent to HKD195 billion this year through a total of 120 listings in Hong Kong, according to a mainland China and Hong Kong market report released by accountancy firm KPMG yesterday.
Still, Hong Kong will remain the preferred destination for IPOs and the Shenzhen-Hong Kong Stock Connect, which links Shenzhen's A-shares with Hong Kong stocks to promote cross-border securities investment, seems likely to enhance both markets' liquidity and add to Hong Kong's competitiveness as an investment center, according to Maggie Lee, head of Hong Kong Capital Markets Development Group at KPMG in China.
Lee noted that along with deleveraging policies in many sectors in China, demand for equity financing is expected to continue among companies, indicating that more Chinese firms will seek Hong Kong listings. More than half of companies applying to list in Hong Kong are from the mainland.
The long-awaited Shenzhen-Hong Kong Stock Connect market link opened on Dec. 5.