The Agricultural Bank of China booth at the Sixth Beijing Financial Exhibition in April. Buoyed by the world's largest IPO of $22.1 billion by the bank, the Hong Kong Stock Exchange was ranked top in terms of IPO value by raising $51.29 billion with 79 flotations in the first 11 months of the year. [Photo / Provided to China Daily]

Listings to make more than $300b by end of year, says Ernst & Young

BEIJING - Chinese IPOs in global markets will likely raise more than $300 billion by the end of the year, topping worldwide IPO fundraising in terms of the number of deals and the proceeds raised, Ernst & Young said on Tuesday.

In the first 11 months of this year, Chinese-listed companies raised $255.3 billion in 1,199 IPOs globally.

The total value of IPOs worldwide in 2010 will exceed the previous record of $295 billion in 2007, according to the consultancy.

"We expect the current IPO momentum to continue in 2011," said Joe Tsang, managing partner at China North Ernst & Young.

"Despite market uncertainty, new IPOs continue to increase around the world, and a large backlog has built up as companies await greater macroeconomic stability," he added.

IPO deals on Chinese stock exchanges have reached 442 so far this year, accounting for 37 percent of the global total. These issues raised $117.9 billion, 46 percent of the total value worldwide, with a year-on-year increase of 170 percent, Ernst & Young said.

Having benefited from strong GDP growth and increasing market liquidity, many Chinese companies have met the requirements for going public, said Ernst & Young's China Strategic Growth Markets Leader Terence Ho.

After China became the "manufacturing center" of the world, domestic companies expanded their financial channels to raise funds, which led to a soaring number of IPO deals, according to Ho.

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Tsang said China's stock markets will continue to play an important role in the global capital markets, especially with the planned launch of the international board in Shanghai.

"There is no significant obstacle to the launch of the Shanghai international board next year in technical, legal and accounting terms," said Tsang. Large multinational companies are expected to be the first to list on the international board.

Ernst & Young forecast that, in 2011, there will be a breakthrough in the listing of commercial banks on Shanghai Stock Exchange.

More venture capital and private-equity companies will support Chinese enterprises planning IPOs in Shenzhen, to strengthen both the small- and medium-sized enterprise board and ChiNext, the statement said.

Ernst & Young said the Hong Kong Stock Exchange is expected to raise HK$400 billion ($51.45 billion) next year.

"Gradual and continuous yuan appreciation will have a positive impact on companies with yuan-denominated assets and operating cash flow," said Tsang.

Buoyed by the world's largest IPO of $22.1 billion by Agricultural Bank of China, the Hong Kong Stock Exchange was ranked top in terms of IPO value by raising $51.29 billion with 79 flotations in the first 11 months of the year.

In addition, the number of Chinese companies listing in the United States has recovered to pre-financial crisis levels, a trend that will continue in 2011, according to the statement.