BEIJING, Dec. 22 (Xinhua) – China's A-share market financing through initial public offerings (IPO) is expected to hit 10-year hight at 470.7 billion yuan in 2020, a likely increase of 86 percent year on year, reported Xinhua Finance, a Xinhua-run financial information platform citing a report from Ernst & Young (EY) on Monday.
In 2020, the EY report projected a total of 395 IPOs on the A-share market thanks to advent of several big cap stocks and implementation of the registration-based IPOs on certain boards, up 97 percent year on year.
Among them, mid and small cap stocks prevailed, with over 30 percent of the IPO financing this year seen below one billion yuan, slightly higher than the previous year.
Shanghai Stock Exchange reported an IPO number topping all the bourses worldwide and top three of the world top 10 IPO financing this year.
Terence Ho, EY Greater China IPO business head, attributed the 10-year high IPO financing in 2020 to effective control of the COVID-19 epidemic and stable running of the sci-tech innovation board (STAR market) in China.
Despite that the COVID-19 dragged down the global economy, IPO markets worldwide remained resilient and continued to grow in the past 2020.
Stock markets in the Chinese mainland and Hong Kong Special Administrative Region in particular posted robust performances in terms of the IPO number and financing aggregate, according to Terence Ho.
Under the new normal of economic development, enterprises in China seized chances to go public to widen their capital basis and inject new vitality into future development, in a bid to tackle the highly uncertain market prospects in 2021, noted Terence Ho.
In the coming year, IPOs in China may be affected by multiple factors, including the optimistic gross domestic product (GDP) growth, the "dual circulation"-characterized new development pattern, boosts for capital market and IPO activities from the 14th Five-Year Plan (2021-2025) which underlines increasing direct financing, and further marketized IPOs, said Terence Ho.
For enterprises queuing for IPOs in China, many unicorns planned to list on the STAR market and ChiNext market, China's Nasdaq style board of growth enterprises and the two boards are likely to be the major force of listed firms, added Terence Ho. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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