(Yicai) Jan. 8 -- Hong Kong’s listing frenzy shows no signs of slowing, with fundraising expected to climb even higher this year, UBS Group China President Janice Hu said, after the city ranked top for initial public offering proceeds last year.

The number of companies listing on the Hong Kong Stock Exchange is projected to reach between 150 and 200 this year, with total fundraising expected to surpass HKD300 billion (USD38.5 billion), Hu, who is also the chairwoman of UBS Securities, told Yicai at a media conference yesterday.

Last year, the bourse had 117 new listings with total proceeds of HKD285.7 billion (USD36.7 billion), increases of 67 percent and 224 percent from the prior year, making it the world’s top exchange by funds raised.

Hong Kong’s leading position as a global financial center and a sizeable pipeline of IPO candidates will continue to underpin strong market enthusiasm, she said.

Hu attributed the sharp growth in IPO activity to several factors, including improving market liquidity, continued policy and regulatory fine-tuning, and a geopolitical environment that turned out to be better than initially expected.

Hong Kong also plays a unique role in connecting Chinese issuers with international capital, Hu noted. In recent years, more Chinese companies have been seeking to list offshore at the same time as global investors aim to diversify their portfolios and reassess Chinese assets.

The IPO boom has also fueled growing interest among institutions in becoming cornerstone investors, Hu said. Under the Hong Kong Stock Exchange’s IPO mechanism, cornerstone investors commit to purchasing a set number of shares at the offering price before listing and accept a lock-up period of six to 12 months. 

In the past, some institutions were hesitant to take on the lock-up requirement, but attitudes have shifted, with many, including sovereign wealth funds, now eager to participate as cornerstone investors. This has given issuers greater flexibility in picking their institutional backers, Hu added.

Hong Kong IPOs are also attracting a more diverse mix of cornerstone investors, with international institutions -- particularly from Europe, Asia, and the Middle East -- generating strong subscription demand, said Chen Ge, co-head of the global investment banking department at UBS Securities.

With faster inflows of foreign capital and continued support from Chinese mainland fund flows, the Hong Kong’s market liquidity has continued to improve, Chen added.

Editors: Dou Shicong, Emmi Laine