Despite a strong rebound in the Hong Kong stock issuance market, investment banks' underwriting rates are at their lowest level in many years. According to capital market data provider LSEG, the average basic fee paid by listed companies going to Hong Kong to banks is 1.5% of the capital raised, the lowest level since 2000. In contrast, the average base rate for the past 25 years was 2.3%, compared to 2.4% in the Asia Pacific region this year. As some deals have yet to be priced this month, the final data may change. The main reason is a surge in the number of mainland listed companies going to Hong Kong for secondary listings. This type of transaction, also known as the “A+H listing” model, pays far less underwriting fees than a true initial public offering (IPO). The average base rate for “A+H listing” deals this year was 0.9%, while the average basic rate for standard IPOs was 2.2%.

Despite a strong rebound in the Hong Kong stock issuance market, investment banks' underwriting rates are at their lowest level in many years. According to capital market data provider LSEG, the average basic fee paid by listed companies going to Hong Kong to banks is 1.5% of the capital raised, the lowest level since 2000. In contrast, the average base rate for the past 25 years was 2.3%, compared to 2.4% in the Asia Pacific region this year. As some deals have yet to be priced this month, the final data may change. The main reason is a surge in the number of mainland listed companies going to Hong Kong for secondary listings. This type of transaction, also known as the “A+H listing” model, pays far less underwriting fees than a true initial public offering (IPO). The average base rate for “A+H listing” deals this year was 0.9%, while the average basic rate for standard IPOs was 2.2%.