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<Research>BofAS Maintains Buy Rating on HKEX; IPOs and BABA-W Added to Southbound Trading Slightly Positive for Turnover
Recommend 34 Positive 51 Negative 20 |
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BofA Securities has issued a report indicating that the fundraising scale of Hong Kong IPOs remained sluggish in 8M24, down 5% YoY to around $19.8 billion. During this period, a total of 43 companies went public through IPOs, compared to 39 in the same period last year. Although recent large-scale IPOs from mainland China in September and those expected in 4Q are anticipated to push the annual fundraising scale beyond last year's $46 billion level, BofA Securities estimated this year's fundraising scale to reach $90 billion, which is still below $105 billion in 2022 and the $300-400 billion levels seen from 2018 to 2021. The broker noted that all recent or upcoming large-scale IPOs are from mainland China. In most cases, the issuers are already listed on the A-shares market, and the H-shares issued by these companies may attract investors from the A-shares market to the Hong Kong market on valuation differences and exchange rates, slightly contributing to Hong Kong market turnover. Despite mainland China's encouragement in April for more leading enterprises to list in Hong Kong to support the market, the upcoming IPOs were already disclosed last year, and no new IPO plans from large Chinese companies have been announced since. Regarding BABA-W (09988.HK) joining the Stock Connect on September 10, during the first four trading days, except for the higher turnover on the first day that accounted for 4% of the total Hong Kong market turnover or 24% of the total southbound turnover, BABA-W southbound trading accounted for 1-2% of the total Hong Kong market turnover or 6-13% of the total southbound turnover, aligning with the broker's forecast made in May. However, BofA Securities could not confirm whether the "additional" turnover came from new funds from China or from southbound investors shifting their holdings from other internet companies to BABA-W. The broker believed that the impact of a single stock on the overall market turnover may still be limited in the short term. BofA Securities maintained a Buy rating on HKEX with a TP of $298, estimating that the upcoming interest rate cut will have a positive impact on turnover. AAStocks Financial News |
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