Chinese stock market emerges as IPO financing’s worldwide champion

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Data from financial information supplier Wind indicates that in the first half (H1) of 2022, the Chinese stock market became the world leader in terms of IPO financing scale.

The A-share market topped the global chart for financing scale in the first half of this year, raising a total of 311.9 billion yuan (about 46.5 billion USD) through IPOs, a 46 percent increase from the same period last year.

According to Wind statistics, the Shanghai and Shenzhen stock exchanges raised about half of the entire amount of money generated globally during the period, placing first and second globally, respectively.

The global financial market has slowed down after reaching new highs in both the quantity of IPOs and the size of financing last year, which contrasts with the A-share market’s development.

According to analysts, the Nasdaq-style sci-tech innovation board (also known as the STAR market on the Shanghai Stock Exchange) and the tech-focused ChiNext market on the Shenzhen Stock Exchange, as well as the return of red chip companies, were the main factors supporting the growth of the A-share market.

Over 90% of the companies that floated on the two bourses during the time were in developing industries with strategic relevance, including information technology and high-end equipment manufacture, which dominated the IPO list.

Industry sources are nevertheless upbeat about the possibilities of the A-share market in the second half of the year despite the upcoming uncertainty.

The Chinese economy is anticipated to maintain its sound momentum and businesses will be able to take advantage of a more favourable financing environment once the epidemic is under control and pro-growth fiscal and monetary policies are in place, according to Louis Lau, partner of KPMG China’s Capital Markets Advisory Group.