IPO market expected to pick up in 2013: PwC

Accounting giant Ernst & Young has suggested similar levels, forecasting that the capital raised through IPOs on the Shanghai and Shenzhen stock exchanges will increase by up to 30 percent this year, after falling to a three-year low in 2012.

According to the latest Grant Thornton International Business survey, Chinese business optimism has risen for 2013, after bottoming out in the fourth quarter of 2012.

Although still at a lower level compared with the first half of 2012, its optimism index rose to 19 percent in the fourth quarter from 11 percent in the third, the report showed.

However, the survey revealed that concerns persisted during the fourth quarter over a shortage of working capital and lack of skilled labor.

Among the respondents, 30 percent cited shortage of working capital as the primary factor restraining business expansion, while 27 percent believed the shortage of skilled workers was the biggest constraint, both down 9 percentage points from the third quarter.

PwC's report said it is expecting 80 new IPOs to list in Hong Kong this year, including 65 on the Main Board and 15 on the GEM Board. Total funds raised are expected to be in the range of HK$120 billion ($15.5 billion) to HK$150 billion, a significant increase on 2012.

Jean Sun, a partner at PwC China, said more mainland-based small and medium-sized enterprises will be listed in Hong Kong. This would be following the relaxation of listing requirements for H shares and the beginning of the conversion of B shares into H shares.

The report said more foreign enterprises will be encouraged to list in Hong Kong under the anticipated changes to secondary listing requirements.

"We expect to see a more active IPO market in Hong Kong in the second half of 2013 and major applicants will likely come from financial institutions, energy and mining related companies, and retail and consumer products," said Edmond Chan, a partner at PwC Capital Market Services Group.

huyuanyuan@chinadaily.com.cn

More reports on China's IPO activity

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Mainland firms cash in on Hong Kong IPOs

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