Figures from PwC revealed contrasting fortunes in funds raised by IPOs in Hong Kong and mainland China last year. Such listings help forge new millionaires.

Initial public offerings in Hong Kong, which are significant liquidity events that wealth managers track, raised a total of HK286.5 billion ($36.6 billion) in 2018, surging 123 per cent from the level chalked up in 2017, according to PricewaterhouseCoopers.

There were a record-breaking 218 new listings in 2018 in terms of numbers of IPOs, of which 143 were main board listings, mostly comprising retail, consumer goods and services companies followed by industrial companies. However, the number of GEM Board [Growth Enterprise Market] new listed companies in 2018 fell from a year earlier, the firm said.

PwC predicts that the Hong Kong market will be dominated by small and medium-size IPOs in 2019, with an expected total fundraising between HK$200 to HK$220 billion supported by a pipeline of over 200 companies lining up for floats and possibly one to two "mega-sized IPOs".

“As we predicted at the beginning of 2018, despite being affected by global geopolitical and economic uncertainties, Hong Kong has reclaimed the global IPO fundraising crown for 2018, supported by mega-sized IPOs and listing regulation reforms including weighted voting right and bio-tech listings," Eddie Wong, partner of Capital Markets Services, PwC Hong Kong, said.

"It is still too early to draw any conclusions about the reforms, because this year is only the first year of the reforms, which are aimed at enhancing the diversification of Hong Kong’s capital market. It will take time for investors and companies to adapt and adjust to the reforms," he said.

IPOs, trade sales and other forces have propelled a large cohort of Chinese billionaires in recent years. Chinese entrepreneurs became billionaires for the first time in 2017, according to a recent report co-authored by PwC and UBS. (See an analysis of its findings here.)

The professional services firm said it welcomed the arrival of the Shanghai Stock Exchange’s Science and Technology Innovation Board, aka STIB.

"We believe that the launch of STIB will enhance the diversification of China’s capital market by providing an alternative listing choice for Chinese technology and innovation entreprises with different listing needs. If all goes to plan, STIB is expected to take effect in the first half of 2019," the firm said.

PwC added that government reforms have slowed market activity in the mainland, where there were 105 IPOs on three main boards last year, raising a total of RMB138.6 billion ($20.21 billion), a fall in funds raised of 40 per cent.