HK's IPO market taking off
Hong Kong's IPO market is seeing a revival, as new deals are flooding the market after themainland's plan to overhaul the economy was announced.
Bad-debt manager China Cinda Asset Management Co Ltd will soon lose its title as HongKong's biggest IPO this year, which it grabbed days ago, to China Everbright Bank Co Ltd,which launched a $2.8 billion offering on Tuesday.
Cinda, one of the four major bad-debt managers established in 1999 to save then-falteringState-owned lenders, said on Wednesday that it raised HK$18.5 billion ($2.4 billion) byissuing 5.3 billion shares at HK$3.58 each, the top of the price range. The shares will starttrading on Thursday.
Funds from the offering will boost bad-debt management, financial investments and assetmanagement, it added.
The announcement came after China Everbright Bank, the lending unit of State-ownedChina Everbright Group, said in its prospectus that it plans to raise up to $2.8 billion byoffering 5.08 billion new shares at HK$3.83 to HK$4.27 apiece. The country's 11th-largestlender is joining its mainland peers in a fundraising spree ahead of new regulations thatrequire lenders to hold more capital as a buffer to risks.
Everbright's 19 cornerstone investors include Ocean Fortune Investment Ltd, Ever IdealLtd, Prudential Insurance Co of America, Sun Life Assurance Co of Canada and SinochemInternational (Overseas) Pte Ltd. Those investors pledged to buy shares worth $1.74billion, representing about 70 percent of the value of the IPO.
Cornerstone investors are usually big institutions that promise large share purchases inadvance and promise to hold them for at least six months.
The two major offerings are helping Hong Kong's IPO market regain vigor. Investors wereworried that the city might see last year's doom extended, after it missed out on the hugeoffering by Alibaba Group Holding Ltd earlier this year. But a slew of other offerings savedthe market from another lackluster year.
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