Has London lost its aura as a venue for initial public offerings? By last year, Hong Kong had overtaken it as the world’s preferred IPO venue, raising $53.2bn, almost five times as much as London, Dealogic data show. Issuers raised more in Hong Kong than in New York, London and Singapore combined. This year, however, the tables have turned: New York leads the pack with 22 deals worth $16bn to Hong Kong’s 11 deals worth $2.4bn, just behind London. Yet the underlying shift is still undeniably eastward: since the beginning of 2006, Hong Kong IPOs have raised $167bn, outstripping New York’s $160bn and $104bn in London.
Glencore’s planned $9bn-$11bn IPO should restore lost ground to London, although the trader-cum-miner’s secondary listing will be in Hong Kong. This month’s spate of Russian IPOs seems unlikely to aid London’s chances, however. Last week, investors pulled the plug on the $1.3bn IPO of Russian mobile phone operator Euroset, while agricultural group Rusagro cut its price to lure investors. Apparently, investors are still spooked by the events of February, when three Russian companies pulled their issues and one cut its price.
Russia’s president, Dmitry Medvedev, meanwhile, sees a listing in Hong Kong as a gateway to mainland China, suggesting others could follow the IPO of Rusal, Oleg Deripaska’s aluminium producer.