SINGAPORE – According to the investment director of a Chinese financial services company, China’s stock market will continue to grow next year even after a 2020 blockbuster.
It has been a “very exciting” year for China’s domestic stock market, William Ma of Noah Holdings (Hong Kong) told CNBC’s “Squawk Box Asia” on Monday, adding that about 400 quotes have been collected. about $ 75 billion.
“In terms of the size and volume of the IPO of the Chinese domestic market, it has reached an all-time high in the last ten years,” said Ma, the company’s investment director.
This trend seems likely to continue, he said, with “high demand” coming from both domestic and institutional investors, while companies in the new economy sector want to go public.
People attend the launch ceremony of Shenzhen Longtech Smart Control Co., Ltd. and Shanghai Hi-Road Food Technology Co., Ltd. on the Shenzhen Stock Exchange on December 2, 2020 in Shenzhen, Guangdong Province, China.
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Mastery of China’s international IPO
According to an EY investigation, the prices of Chinese companies have dominated the rankings in 2020.
Among the top ten lists in the world, Chinese companies formed half of the list and also ranked in the top three. These include the quotation of Chinese chip maker SMIC in Shanghai’s STAR market, as well as JD.com’s heavy e-commerce secondary list in Hong Kong. No Asian-Pacific company outside of China managed to surpass the top ten.
However, there was also a notable exception among Chinese companies: the financial technology giant and Ant Group, affiliated with Alibaba. The firm’s long-awaited double listing in Shanghai and Hong Kong is expected to be the world’s largest initial public list. But that IPO was abruptly suspended in November as the company faces regulatory scrutiny.
Ringo Choi, leader of EY’s Asia-Pacific IPO, Ringo Choi told CNBC that the strength of Chinese companies on the list demonstrates the importance of the mainland economy and its ability to affect stock market performance.
“That’s why all markets try to attract those companies or companies on the continent that make it public there,” Choi said.
Still, potential market returns to trade nationwide are likely to be an attractive proposition for mainland Chinese companies, he said.
EY research showed the return rate of the first day of IPOs in 2020, which reached 187% for the Shanghai-style Nasdaq-style STAR market, compared to 44% for the Shanghai main board .
In comparison, Snowflake, the largest software investment in history and the largest non-continental company to make a public debut this year, rose more than 111% on the first day of trading on the New York Stock Exchange in September.