HONG KONG — A price war has broken out in the Hong Kong financial world as competition among investment banks drives down underwriting fees for initial public offerings in what has become the world’s hottest market for new stock listings.
As a result, banks now earn only a fraction of the commissions they received just a few years ago, even as companies raised 107.1 billion Hong Kong dollars ($13.6 billion) through IPOs in the first half of this year, topping two major rivals in the U.S. Some Chinese competitors are willing to accept fee cuts in exchange for lead roles on deals, according to several industry insiders and a review of company prospectuses.