Despite the huge impact of inflation in different economies, the monetary authorities were not sitting in their oars, rather they were fighting the rise through continuous increases in interest rates.
Hong Kong Initial public offering (IPO) The market failed to recover from its weak sentiment after the comparatively failed listing of Chinese liquor company ZJLD Group. like mentioned By CNBC, shares of ZJLD Group fell 18% on the first day of trading on April 27, showing just how much mistrust exists in the industry.
Last year was a very turbulent year for the global financial system, as high inflation shook almost every economy. With fiat currencies losing their intrinsic value, many investors have gone to the sidelines, seeking safe assets that can at least help preserve capital. While most stock markets have seen a battery over the past year, the Hong Kong markets have been of particular interest.
Known as a major financial center in the Asia-Pacific region, the slow growth of the stock market means that the economy is far from recovering to normal levels.
“Sentiment in the IPO markets has yet to build,” Ringo Choi, head of IPO Asia Pacific at EY, said in a statement, adding that “a lot of industries are suffering at the moment.”
Choi noted that technology companies in Hong Kong are facing great pressure from the economic and trade tensions between the United States and China. In addition, it is believed that the poor outlook also stems from the low prices of electric vehicles in the region.
Since the pandemic, corporate valuations have dwindled, and the current economic climate makes it impossible to revisit these impressive levels anytime soon.
Ratings are not as high now as they were two or three years ago. “We still need some time,” said Robert Lowe, head of bidding for Deloitte China Capital Market Services Group.
The effect of rising interest rates on the IPO market in Hong Kong
Despite the huge impact of inflation in the different economies, the monetary authorities were not sitting on their oars, rather they were fighting the rise through raise interest rates. With the Hong Kong stock market and IPO in general down 15% in 2022, it was considered one of the worst performing markets of the year.
One of the main factors highlighted by experts is the impact of China’s coronavirus policy as well as the uncertainty that comes with higher interest rates.
“The concern remains with the higher interest rate environment and a lot of the interest in the Greater China region is with the recovery of the economy,” said Irene Chu, partner at KPMG China.
Despite this bleak outlook, experts are optimistic that 2023 will mark a major turnaround for the Hong Kong stock market. This bullish trend is particularly shared by the trio of Deloitte China, EY, and KPMG. This assertion stems from the fact that the borders of China and Hong Kong are now reopening to work with More relaxed rules It can generally promote growth in the short to medium term.
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-world applications of blockchain technology and innovations to drive public acceptance and global integration of the emerging technology. His desires to educate people about cryptocurrencies have inspired his contributions to popular blockchain-based media and websites. Benjamin Godfrey is a fan of sports and farming.