Migration to International Financial Reporting Standard (IFRS) 9, or its local equivalent, is likely to create operational challenges across many of Asia-Pacific's (APAC) banking systems. These issues would have a negative initial effect on capital, and potentially raise the volatility of earnings and regulatory capital ratios, says Fitch Ratings.
Chinese Companies in Spotlight of Global IPO Activities
The value of IPOs in Hong Kong will reach a new high in 2010, while the value of IPOs in Shanghai will increase more than twofold, predicts a forecast by Ernst & Young.
According to the consultancy firm's year-end Global IPO Update, IPO activities started to pick-up in the second half of 2009, principally driven by deals in China and Brazil.
From 1 January to 30 November 2009, capital raised globally was US$94.9 billion, which is at parity with the amount raised in 2008 (US$94.6 billion). Ernst & Young forecasts that the total IPO value for 2009 will exceed US$100 billion.
"Global IPO activities experienced exponential growth in the last quarter of 2009. The US$49.5 billion of funds raised in October and November alone exceeded the amount for the first three quarters combined of US$45.4 billion. The Chinese Mainland and Hong Kong lead the global IPO recovery," notes Joe Tsang, assurance leader of China North at Ernst & Young.
Ernst & Young reveals that the Hong Kong Stock Exchange will likely come first in terms of 2009 global IPO funds raised, with a total of HK$246 billion raised. IPO activities have grown exponentially in the last quarter, raising HK$183 billion, or 74% of total funds raised there for the year. China Pacific Insurance, the last mega IPO in 2009 raising HK$24.1 billion, was listed on the Hong Kong Stock Exchange on 23 December.
Ernst & Young expects that this trend will continue in 2010, reaching a record of HK$370 billion for next year, which is 28% more than the total IPO funds raised in 2007 on the Hong Kong Stock Exchange, itself a historical high for Hong Kong.
"The Chinese Mainland companies will continue to be the major driver for IPO activities in Hong Kong. However, the listing of companies from Hong Kong and other countries will increase in 2010. We will also see more fund raising activities through spin-offs," says Terence Ho, strategic growth markets leader of Ernst & Young.