Funds raised in mainland and Hong Kong initial public offerings (IPOs) are expected to exceed $50 billion for 2007, leading global services firm Ernst & Young said yesterday in Beijing.

Mainland and Hong Kong companies raised $14 billion through IPOs in the third quarter, double that of the previous year, according to an Ernst & Young report.

“Provided investor confidence remains positive, there is every reason to believe funds raised by Chinese companies will exceed $50 billion for 2007,” said Joe Tsang, assurance leader for North China at Ernst & Young.

Some 77 companies listed on the mainland and Hong Kong in the third quarter, also a quarterly record, according to the report.

The five biggest China IPOs in the third quarter, in order of funds raised, were: Bank of Beijing, Sino-Ocean Land Holdings, Fosun International, Bank of Nanjing and Western Mining.

In the global context, China led activity by capital raised, making up 25 percent of the global total, followed by Brazil with $9.3 billion, and the US, with $8.3 billion.

Three of the world’s top 10 IPOs and five of the world’s top 20 IPOs by funds raised were from China in the third quarter, said Philip Leung, IPO leader for the Far East at Ernst & Young.

In terms of preferred fundraising locations, more Chinese companies chose to list locally, with more than 50 percent of firms opting to list on the Shanghai or Shenzhen stock exchanges in the third quarter, the report said.

Companies in the financial and real estate industries generated five of the top 20 China IPOs in the first three quarters of the year, while companies in the materials industry generated four of the top 20 China IPOs.

Globally, $57 billion was raised in 428 IPOs in the third quarter. The amount of capital raised increased year-on-year by 27 percent and decreased by 36 percent from the previous quarter. Global IPO activity was driven by the emerging markets of Brazil, Russia, India and China, which together raised $27 billion in a record 118 IPOs and accounted for seven of the 10 largest IPOs in the third quarter, it said.

Source: China Daily

Copyright Fund China 2009.

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