Last week, I wrote about the delay in the launch of Shanghai Fosun Pharmaceutical’s long awaited equity offering in Hong Kong. As was expected at the time, bookbuilding finally started on October 16 for what is an accelerated timetable (on account of the upcoming bank holiday) that will now see pricing on October 24, and listing and start of trading on October 30. read
Shanghai Fosun Pharmaceutical last week pushed back the launch of its US$600 million Hong Kong initial public offering from 11 October to, most likely, 15 October – possibly putting it on track for an accelerated marketing timetable. (See my prior column in Money Post on 30 April). read
Around this time last year I wrote a preview of the IPOs expected to arrive on the Hong Kong market. It’s telling that most of those same deals are still in the pipeline, twisting in some interminable pre-launch marketing limbo. read
HONG KONG (Dow Jones Banking Intelligence) – Order taking began last week for the IPO of Far East Hospitality Trust (“Far East HT”) in Singapore. Pricing is currently scheduled for August 16, with listing on August 27. The offering is large and visible and was already substantially covered at the time of launch by cornerstone investors. This could provide a well-needed boost to Singapore’s primary market, which has so far this year seen a number of deals pulled, cancelled or otherwise postponed. read
In this day and age, and amid continued volatile markets, for an IPO to succeed it’s pretty much a pre-requisite to secure cornerstone investors. Not only does their involvement considerably de-risks a transaction by parking away a big chunk of the shares on offer at an early stage; it also provides a high degree of confidence to other institutions – and to retail investors – to encourage them to subscribe to a deal that’s already been taken up by big, visible names. read
In 2004, Google came to market with an IPO. The company took an unconventional approach to pricing. It put its offer to all investors through an open, Dutch auction. All investors, whether individuals or institutions, were asked to submit orders. The deal was then priced at exactly the level required to sell all shares at the highest possible valuation. read
HONG KONG (Dow Jones Banking Intelligence) – Forget about everything you have read about banks in Asia being asked to provide hard underwriting commitments for IPOs. Brokers have now found a new way to avoid remaining stuck with shares on their books – thanks to increasingly common cornerstone investor arrangements. read
An old joke tells of two matrons having lunch at an expensive restaurant. One lady says, “The food is so bad,” and the other says, “Yes, and the portions are so small.” This neatly sums up IPO bankers’ first half: markets are challenging and they are working harder to sell smaller deals for less fee income. Bankers’ complaints about difficult deals are likely to be followed by grumbling that they don’t have enough of them. read
I was interviewed this morning by anchor Bryan Curtis on Hong Kong’s RTHK 3 radio “Money For Nothing” business programme, on Malaysian and Hong Kong IPOs. read
Successfully closing IPOs is challenging in these tricky markets. Hong Kong has had its fair share of new listings pulled, delayed or altogether indefinitely postponed over the last year or so. The Securities and Futures Commission’s response has been to turn the screws on new issue sponsors and, now, on auditors. read
