Hong Kong IPO issuance has seen healthy volumes so far this year. At US$68.3 billion, according to Dealogic, new listings on HKEx have already reached the level achieved for the entire year in 2014. The outcome of deals, however, remains heavily dependent on cornerstone investors, while oversized syndicates have sadly been back in full force since at least late spring. read
In Asia, cornerstone investors are regarded as a vital ingredient for successful major listings. And Hong Kong – where such investors are subject to lock-up restrictions – has also increasingly seen the advent of anchor investors. read
Amid more deals coming to market in recent weeks, there has been much talk about a potential re-launch in Hong Kong of WH Group’s IPO, a deal that was famously pulled last April after a mammoth syndicate of 29 bookrunners failed to secure interest from investors. read
The recent overhaul of Hong Kong’s IPO regime has arguably resulted in better quality issuers coming to market. read
I was interviewed on CNBC’s “The Call” this morning by anchors Bernie Lo and Emily Chan on what’s in store for investors with the IPO in Hong Kong of mainland Chinese insurer PICC Group. read
The total number of shares subscribed for by cornerstone investors in Glencore’s IPO, which is targeting proceeds of about US$10 billion (excluding a 10% over-allotment option), is expected to represent approximately 31% of the global offer, assuming the overallotment option is not exercised. The US$3.1 billion tranche therefore represents one of the largest cornerstone books by value ever achieved for an IPO. But there are consequences to the practice, which could come back and haunt the issuer as well as other investors in the company. read
