Hong Kong’s dry spell for IPOs set to end with big China deals


HONG KONG: After a dismal first six months, issues are lastly wanting up for preliminary public choices (IPOs) in Hong Kong, as a number of giant Chinese companies line up to listing in Asia’s monetary hub within the second half.

Battery supplies producer Tianqi Lithium Corp simply opened its books for what’s set to be the town’s first billion-dollar deal this 12 months, whereas China Tourism Group Duty Free Corp might relaunch an providing of round US$2bil (RM8.8bil).

Along with a number of different mid to large-sized deals within the pipeline, they’re poised to revive a dormant market the place companies raised a paltry US$2.6bil (RM11.4bil) between January and June. That’s a 92% droop from final 12 months and the bottom sum for the identical interval since 2009.

The pick-up in upcoming listings speaks of an bettering surroundings for valuations, because the easing of virus-related curbs and Beijing’s dialing again on a company crackdown spur a world-beating rally in shares in China and Hong Kong.

Better readability on guidelines for Chinese share choices overseas may additionally “encourage more new listings” in Hong Kong, Charles Zhou, an analyst at Credit Suisse Group AG, wrote in a be aware final month.

The stream of constructive information from China has propelled the benchmark CSI 300 Index towards a technical bull market and analysts expect extra constructive coverage reinforcements within the second half of the 12 months.

“If it happens, that would hopefully help to push through some of our pipeline of equity deals that are waiting for a better market window to open,” mentioned Selina Cheung, co-head of Asia fairness capital markets at UBS AG in Hong Kong.

In the primary half, Hong Kong noticed just one IPO. That was again in January plus nearly all of corporations which have debuted this 12 months are buying and selling beneath water. Notably, IPO exercise has dried up globally as buyers fret over inflation, hawkish central banks and recession fears.

Hong Kong’s dry spell now appears set to end with a flurry of small-size deals coming by way of late in June as issuers hurried to benefit from a brief window favouring Chinese equities.

Tianqi Lithium’s potential itemizing paves the best way for July to be the strongest month for IPOs within the Asian monetary hub this 12 months.

The pipeline of choices of about US$500mil (RM2.2bil) or extra additionally consists of snack maker Weilong Delicious Global Holdings Ltd and Wego Blood Purification, the dialysis unit of China’s Wego Group. — Bloomberg

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