Hong Kong IPOs’ Promising December Is Starting to Look Murky
(Bloomberg) -- December was expected to show the return of major initial public offerings to Hong Kong after months marked by a drought of big deals, but plans are changing fast and not in a good way.
China Tourism Group Duty Free Corp., the world's largest travel retailer, decided on Friday to suspend a $5 billion listing, citing sluggish capital markets and the pandemic. Artificial intelligence firm SenseTime Group Inc. is downsizing its planned IPO, seeking up to $768 million compared with initial plans of raising at least $1 billion.
Pharma company Asymchem Laboratories Tianjin Co., the biggest offering in the city since September, ended up raising about $917 million, falling short of the $968 million it could get at the top price. Cloud Village Inc., the music streaming arm of gaming giant NetEase Inc., is down about 3% since its debut on Dec. 2, following an IPO that also ended up being less than half of the $1 billion it had considered.
The market for new shares listing has been rocky in the Asian financial hub since China broadened a clampdown over several sectors and made it harder for major tech giants to go public abroad. Sentiment deteriorated further on Friday as Didi Global Inc. said it was delisting from New York about five months after it started trading in the U.S., while seeking a listing in Hong Kong.
If CTG Duty Free had moved on with its offering at the $5 billion size, the deal alone would raise more in proceeds than 17 deals priced between Aug. 13 and Dec. 1, Bloomberg-compiled data show.
“The Hong Kong IPO market will be put on ice,” said Justin Tang, head of Asian research at United First Partners. He added that CTG Duty Free's decision reflects the uncertain outlook due to omicron as well as investor sentiment in relation to Chinese stocks.
Read More: China Duty Free's H.K. IPO Freeze Shows Weak Market: Street Wrap
To be sure, smaller deals are moving on in Hong Kong. Gushengtang Holdings Ltd., a traditional Chinese medicine health care service provider priced shares at the top of a marketed range in a $104 million offering. JL MAG Rare-Earth Co., a manufacturer of rare earth materials already listed in Shenzhen, started to gauge investor demand for a share sale on Monday.
In the longer term, more major Chinese firms already listed in the U.S. could follow Didi's lead and sell shares in Hong Kong, potentially boosting proceeds raised in the city next year. Shares on the Hong Kong Exchanges & Clearing Ltd. were up more than 7% since Thursday's close.
Read More: China ADR ‘Homecoming' May Light Regional Financials Growth Fire
©2021 Bloomberg L.P.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
