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Hong Kong's IPO market withers as billion-dollar listings lapse

China's regulatory onslaught leads to slowdown in the hub's market

Hong Kong | IPO market | Baidu

Julia Fioretti | Bloomberg 

Baidu Inc’s Chairman Robin Li at the firm’s listing on Hong Kong Stock Exchange, on March 23. (Photo: Reuters)
Baidu Inc’s Chairman Robin Li at the firm’s listing on Hong Kong Stock Exchange, on March 23. (Photo: Reuters)

Hong Kong’s primary-listing market is going through a dry patch in what is normally the busiest time of the year.

Several potential billion-dollar initial public offerings ranging from supermarket owner WM Tech Corp. to health-care startup We Doctor Holdings Ltd. have let their applications lapse in recent weeks as regulatory scrutiny and stock market weakness crimps listings.

Large IPOs falling by the wayside are a further sign of how China’s regulatory onslaught is causing a downturn in the financial hub’s market for first-time share sales. President Xi Jinping’s push to align companies with his vision of “common prosperity” has caused a roadblock. After a stellar first half, the value of IPOs dipped to just $6.2 billion in the third quarter — the lowest since the start of the pandemic and behind South Korea for the first time in four years.

We Doctor’s planned float —which could have raised as much as $3 billion — got caught up in China’s tightening oversight of how its tech giants manage the data they collect.

Meanwhile WM Tech, which is behind the Wumart chain and Metro AG’s outlets in China, faced questions from the bourse about its business operations, Bloomberg News reported. The company, which had been seeking to raise as much as $1 billion, is no longer actively pursuing an IPO, sources said.

Anjuke, backed by online classified marketplace Inc., had also been targeting a $1 billion IPO, IFR reported. However the combination of falling investor enthusiasm for tech stocks as well as the current travails of China’s debt-ridden property sector mean the timing was not opportune.

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First Published: Mon, October 18 2021. 01:36 IST