As US IPO market sinks, listings head to China

Stock listings in Asia have raised $104 billion this year, accounting for a record 68% of global volume, data compiled by Bloomberg show. By contrast, US IPOs represent just 14% of the $153 billion fetched globally, the lowest ever for what has traditionally been the busiest listings market in the world.

The strong Asian showing is mostly down to Chinese IPOs, which have continued to come thick and fast even as rising interest rates and the prospect of a recession put a lid on first-time share sales in most major markets. Of the 10 largest listings globally this year, six were from Chinese companies either on mainland exchanges — the so-called A-share market — or in Hong Kong, the data show.

“In 2022, as the world deals with inflation and global tensions, the IPO epicenter in terms of volume has shifted east,” said James Wang, co-head of ECM at Goldman Sachs Group Inc, in Asia ex-Japan.

“The continuity of such appears sustainable for the time being given some sizable Hong Kong IPOs are lined up to potentially test markets before year end.”

In the US, which accounted for more than half of last year’s record $657 billion of IPO proceeds, the market has come to a sudden halt as inflation fears and heightened volatility keep valuations depressed and cause investors to steer clear of the high-growth companies that typically dominate IPO activity. The unwelcoming market conditions have forced highly anticipated listings like Mobileye NV and Chobani Inc. to be pushed back or scrapped altogether.