This year, the new stock market in Hong Kong has made a strong comeback, with a total annual fundraising of about 280 billion HKD, and is set to return to the top spot in new stocks globally. However, at the same time, the basic underwriting rate of Chinese issuers continuing to rely less on international investment banks this year, the basic underwriting rate of investment banks has hit a 25-year low, an average of only 1.46%. The industry believes that under the continued fierce competition, the future rate levels will hardly show significant improvement.
The basic fee rate is more than 20% less than the peak
According to LSEG statistics, as of December 15, this year, the average underwriting rate for local IPOs and second listings in 2025 (only basic fees, not discretionary incentives) is 1.46%, a further decline from 1.8% in 2024, reaching the lowest level since 2000 (Figure 1). In 2020 and 2021, when the amount of new equity fundraising in Hong Kong still exceeded $300 billion, the basic underwriting rate charged by investment banks was almost 1.9% on average. The current new stock market has recovered substantially, but the fee level is still more than 20% lower than at its peak.
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