Prada makes rapid progress to Hong Kong IPO - media

MILAN, Feb 24 (Reuters) - Italian fashion house Prada is quickly moving towards a Hong Kong listing thanks to a more favourable regulatory environment in Asia, Chief Executive Patrizio Bertelli told an Italian newspaper.

Prada's board gave its green light on Jan. 27 to an initial public offering (IPO) in the Asian financial centre that could value Prada at more than 6 billion euros ($8.25 billion).

"Hong Kong welcomed us with open arms. The mutual recognition of Italian law, which normally takes three months, was done in only 15 days," Bertelli, who is married to designer and owner Miuccia Prada, was quoted as saying in an article published on Thursday in La Repubblica.

La Repubblica also said the market debut should take place between June and July and that Prada would list between 15 percent and 20 percent of the group.

Of this, 10 percent would be shares held by the family owners and 5 percent from creditor bank Intesa Sanpaolo of Italy.

If successful, the much-awaited deal would make Prada the biggest European fashion brand to float in more than a decade and the first Italian company to be listed in Hong Kong.

($1=.7270 Euro)

Prada Shuns Milan for Hong Kong as IPO Signals Economic Shift
By Elisa Martinuzzi - Mar 7, 2011 7:01 AM
Bloomberg

Prada SpA, the fashion house known for its Miu Miu bags and Church’s shoes, is planning the largest initial public offering of a family-owned Italian company since 2006. Investors in Prada’s hometown of Milan will have to reach about 5,800 miles away to buy the stock.

Prada is shunning the Italian exchange for a $2 billion IPO on the Hong Kong exchange because it’s closer to the retailer’s fastest-growing region. The decision was made to “seize the best opportunities offered by the international capital markets,” Chief Executive Officer Patrizio Bertelli said in a statement when it announced the IPO.

Losing Prada highlights the struggles facing Borsa Italiana, a unit of London Stock Exchange Group Plc (LSE), to gain new listings, said investors, including Lorenzo Crispoltoni of Banca Fideuram SpA. The Italian exchange lost half its value in the past three years amid a dearth of IPOs and the drop in stock prices since 2007. The 332 traded companies on Borsa Italiana have a combined market capitalization of 425 billion euros ($593 billion), ranking the exchange no higher than seventh in Europe, data from the World Federation of Exchanges show.

“The Borsa’s troubles mirror sluggish economic growth and an exchange that isn’t as visible as others on a global scale,” said Milan-based Crispoltoni, who helps oversee 2.5 billion euros. “Companies that have a global market are looking elsewhere for success.”

Slow Growth
Economic growth of just 1.1 percent last year combined with the region’s sovereign debt crisis to erase 13 percent from the country’s benchmark FTSE MIB Index (FTSEMIB) in 2010. Italian shares are now the cheapest relative to Europe, the U.S. and the emerging markets on a price-to-book value basis since 1992, according to London-based Barclays Plc. The country is Barclays’s preferred “deep-value” play, analysts led by Edmund Shing wrote in a note to clients March 2.

Italy’s gross domestic product grew at an average annual rate of 1.5 percent from 1999 to 2007, compared with 2.2 percent for the European Union. Italy contracted 5.4 percent in 2009.

The economy and weak stock market have deterred Italian companies, especially small ones, from going public, said Gioacchino Attanzio, chief executive officer of Milan-based Aidaf, a group that represents family-owned companies.

“We’re in a paralysis,” he said. “Entrepreneurs are more worried than ever about losing control because their businesses are weak.”

Pulled IPOs
Italian biotechnology company Philogen SpA postponed a 65 million-euro IPO last month after Bayer AG, its biggest customer, canceled contracts. Toymaker Giochi Preziosi SpA, ferry operator Moby SpA and Intesa Sanpaolo SpA (ISP)’s Banca Fideuram asset-management unit also have scrapped plans for share sales.

Enel Green Power SpA sold 2.5 billion euros of stock in November, the country’s largest IPO in 11 years.

Prada is making its fifth attempt in the past decade at selling shares. The company, controlled by Bertelli, his wife Miuccia Prada and her family, is generating record sales.

Revenue grew 31 percent last year to 2.05 billion euros led by demand in Asia, where sales rose 48 percent. Credit Agricole SA (ACA), Goldman Sachs Group Inc. (GS), Intesa Sanpaolo SpA and UniCredit SpA (UCG) are helping manage the company’s Hong Kong IPO, Prada said in a Jan. 28 statement.

‘Water to Fashion’
“From water to fashion to industry, you have leading Italian brands that are household names in the world,” Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd., said in an interview in October while visiting Italy to meet company executives. “A listing in Hong Kong would automatically enhance their brand recognition.”

Borsa Italiana envisioned in 2007 when it was sold to the LSE that the London connection would help lure more companies to the exchange, which at the time of the combination identified 2,000 companies as potential IPO candidates. The number of companies traded in Milan fell to 332 last year from 344 in 2007.

The exchange needs to offer “better terms” to companies considering IPOs, Borsa Italiana Chief Executive Officer Raffaele Jerusalmi said in a parliamentary hearing on March 2. Borsa Italiana officials declined to be interviewed for this article.

Lagging Asia
Italy isn’t the only market that’s trailing Asia for IPOs. Initial sales in Hong Kong raised $49.5 billion in 2010, the most in developing markets, compared with $28.4 billion in western Europe, data compiled by Bloomberg show. L’Occitane International SA and its parent raised about $780 million from the first Hong Kong IPO of a French company last year.

Borsa Italiana’s difficulties coincide with a wave of consolidation with LSE bidding $3.15 billion for Toronto Stock Exchange owner TMX Group Inc. Deutsche Boerse AG and NYSE Euronext disclosed last month that they plan to merge.

The Italian Exchange drew criticism from some market operators when a data feed broke down on Jan. 22 and shut down Borsa Italiana for 6 1/2 hours just as violence in Libya sent global markets tumbling. The LSE stopped trading on Feb. 25 after a technical fault.

Luxury sportswear maker Moncler, whose biggest shareholder is Carlyle Group, is planning what may be the biggest Italian IPO this year. Moncler’s sales increased 15 percent last year to about 440 million euros.

“If Italy was growing at 3 or 4 percent, the IPO market would be buoyant,” said Aidaf’s Attanzio. “It’s a situation that will have to change.”

Glencore dual listing to eye $100b
The Standard
Mandy Lo and agencies
Tuesday, March 08, 2011

Glencore, the world's largest commodity trader, may kick off its initial public offering next month at the earliest, seeking to raise nearly HK$100 billion in a dual listing in Hong Kong and London.

Assuming the fundraising size in both cities is the same - about HK$46.8 billion each - it will be London's biggest and Hong Kong's sixth-largest IPO deal. But its valuation is uncertain as a likely merger with Swiss miner Xstrata before or after the flotation will impact the pricing of the IPO.

Switzerland-based Glencore is reportedly set to be listed on the Hong Kong bourse in April or May.

Glencore chief executive Ivan Glasenberg is keen on the merger with Xtrata, whose chief executive Mick Davis may become chairman of the merged entity, The Sunday Times reported.

Glencore's convertible bond launch in December 2009 valued the firm at US$35 billion (HK$273 billion). But a recent valuation by Michael Rawlinson, natural resources head at London's Liberum Capital, put the firm's worth at US$62 billion.

Bankers and investors covering natural resources also believe Glencore will merge with Xstrata, in which it currently owns a 34 percent stake, the Financial Times reported onWednesday.

"Glencore is 100 percent focused on the IPO - nothing else," it cited a deal insider as saying.

Glencore's net income surged 40 percent to US$3.79 billion last year.

Meanwhile, Hutchison Whampoa (0013)'s port holding trust in Singapore started book building yesterday, with market expectations for the trust to be priced at the upper end of the indicative range of US$0.91-US$1.08 per unit.

The trust units start trading on the Singapore stock exchange on March 18.

Separately, mainland oilfield equipment maker Hilong Holding has roped in former Citic Pacific (0267) chairman Larry Yung Chi-kin to invest about US$10 million in its HK$1.48 billion flotation as a cornerstone investor, sources close to the deal said.

Hilong, a drill pipe supplier for Sinopec (0386), yesterday kicked off its roadshow to sell 400 million new shares at HK$2.50-HK$3.70 apiece. It hopes to raise up to HK$1.48 billion, a term sheet said.

Top Spring’s Hong Kong IPO sells out on first day
Top Spring International's $257 million IPO receives strong demand thanks to a deep discount in the offering price and the company's good fundamentals.
By Lillian Liu | 11 March 2011

Top Spring International Holdings, a Chinese property developer, kicked off a roadshow for its HK$2 billion ($257 million) Hong Kong initial public offering yesterday.

Investors shrugged off concerns about the effect of the government's tightening policy on China's overheated property market and showed strong interest in the deal, fully covering the books on the first day.

The Shenzhen-based developer is offering 250 million shares, all primary, at HK$6.23 to HK$8.10 each. That suggests the company could raise between HK$1.55 billion and HK$2 billion.

Based on Top Spring's 2011 forecast earnings, the offering pitches the company at a price-to-earnings (P/E) ratio of around 4.3 times to more than 5 times. That is a deep discount compared with the company's domestic rivals. Shares in Hong Kong-listed Country Garden and Agile are currently quoted at a P/E of 9.5 times and 7.5 times, respectively, according to data from Bloomberg.

China's largest property developer, China Vanke, which is listed on the A-share market, is trading at 9.9 times 2011 projected earnings.

Top Spring is the second property developer to tap the equity market in less than a month. Wharf, a Hong Kong-listed conglomerate, said in mid-February that it would raise HK$10.05 billion through a renounceable rights issue to fund its property investments on the Chinese mainland.

Top Spring attracted high-quality anchor investors yesterday, including a corporate investor and a large pension fund, which both placed chunky orders. Besides the good valuation, investors also like the company’s management, its portfolio of projects in China’s fastest-growing cities and its strong partnership with Scarborough Group, a British real estate and leisure activities group, according to a source.

The company has been developing real estate projects in cities such as Shenzhen, Hangzhou and Changzhou in the Pearl River Delta and the Yangtze River Delta. It plans to use HK$1.48 billion, or 90% of the net proceeds, to acquire new projects for development on the Chinese mainland, and the rest of the HK$165 million will be used for general corporate and working capital purposes, according to the company.

Around 225 million shares, or 90% of the offering, have been allocated to institutional investors and the remaining 10% will go in the Hong Kong public offering.

The deal comes with a 15% greenshoe option that, if fully exercised, would allow the company to raise up to HK$2.3 billion by issuing an additional 37.5 million primary shares.

The shares price on March 17 and the trading debut is scheduled for March 23. HSBC, Macquarie and Nomura are managing the sale.

Cooling the runaway property market has become a priority for Chinese authorities. In response to fast-rising property prices, policymakers have been deploying market-dampening measures since early last year. The central bank has hiked interest rates three times during the past four months to curb growing asset prices.

However, demand has remained strong. In 2010, home sales by China Vanke and Poly Real Estate, the country’s two largest developers, jumped more than 70% and 50% year-on-year, respectively, according to the companies’ statements to the stock exchange in Shanghai. Vanke’s January sales rose 221% to a record Rmb20.1 billion ($3 billion) as a result of selling 1.65 million square metres of properties during the month.

http://www.financeasia.com/News/250835,top-spring8217s-hong-kong-ipo-sells-out-on-first-day.aspx

Bloomberg
Hong Kong Air Woos Private-Equity Funds, Cathay Passengers

March 14, 2011, 2:00 AM EDT

By Fion Li
(Adds China travel growth in third paragraph.)

March 14 (Bloomberg) -- Hong Kong Airlines Ltd. expects to win private-equity investment by early next quarter as it prepares for an initial public offering of as much as $1 billion and challenges neighbor Cathay Pacific Airways Ltd.

Goldman Sachs Group Inc. is working on arranging a stake sale to private-equity investors, who will become the second- largest group of shareholders behind the investment arm of China’s Hainan province government, President Yang Jiang Hong said in an interview at the carrier’s Hong Kong headquarters on March 10. He didn’t give details on the talks.

The airline last week agreed to order 38 Boeing Co. widebody planes to tap demand in Hong Kong and China, the world’s fastest-growing air-travel market. The carrier, with less than 10 percent of Hong Kong’s outbound travel, needs to boost services to lure lucrative corporate flyers from Cathay, said Royal Bank of Scotland Group Plc analyst Andrew Orchard.

“If they want to survive, they have to be aggressive,” Orchard said. “Hong Kong is dominated by Cathay.” Orchard, who is based in the city, said he had only flown on Hong Kong Air once or twice.

To help pay for expansion, Hong Kong Air plans to hold an IPO next year, where it may raise from $500 million to $1 billion, Yang said. The carrier may also take full control of affiliate Hong Kong Express ahead of the share sale, he said.

Profit Forecast

Hong Kong Air made a net income of about HK$110 million ($14 million) in 2010, its first annual profit, and it may double that this year, Yang said. Passenger numbers will likely rise to 4 million from more than 2 million, he said.

The airline also expects its cargo unit, which started last year, to account for 30 percent of revenue this year from 20 percent, as it adds more freighter flights, he said.

Cathay, with a group fleet of about 170 planes, flew 26.8 million passengers in 2010. It boosted profit to HK$14 billion from HK$4.7 billion a year earlier, helped by rising travel and asset sales. The airline ordered 25 Boeing and Airbus SAS planes last week.

Hong Kong Air and Hong Kong Express operate a total 18 Airbus A330-200s and Boeing 737-800s planes, including freighters. Hong Kong Air agreed to order 32 Boeing 787s last week, including two for VIP operations, and six 777 freighters. The airline also has 30 A320s and 27 twin-aisle planes on order at Airbus, according to the planemaker’s website.

China Network

The two carriers fly to nine cites in China, as well as to Moscow and Asian destinations, according to their website. Taipei flights will begin as early as next month, and a second daily service to Singapore is due to begin on June 28. Long-haul routes including Paris, London, Vancouver and U.S. cities will be added over the next two years, Yang said.

Hong Kong Air plans to add an all-business class service to London next year after opening an executive lounge at its hub in 2010, Yang said. The carrier is also trying to lure premium passengers by charging as much as 20 percent less than Cathay and by tapping ties with Hainan province’s HNA Group, Yang said. HNA, which owns 45 percent of Hong Kong Air, also controls Hainan Airlines Co. and Beijing-based Grand China Air, as well as investing in airports, hotels and retail.

“Compared with Cathay, we know the China market better,” Yang said. “We are in a stronger position to capture the growth.”

China’s international air travel may grow 11 percent a year through 2014, almost double the global pace, according to the International Air Transport Association.

Cathay Upgrades

Cathay is spending HK$1 billion rolling out new business- class cabins and it’s also renovating lounges, incoming Chief Executive Officer John Slosar said last week. The carrier is used to competition from its experience battling international carriers in its home market, he said.

“We compete everywhere, everyday,” he said. “Like any business you need to give people a reason to buy your product and we really try to keep focused on that.”

Cheaper fares may also do little to help win corporate travelers as employers generally pay for trips, said RBS’s Orchard. Cathay passengers may also be reluctant to give up the chance to earn frequent-flyer points by using a different carrier, the analyst said.

“I can’t see why people would want to lose the mileage,” he said. “Cathay has a very good frequent-flyer program.”

Oasis Hong Kong Airlines Ltd., which challenged Cathay with low-cost flights to London and Vancouver, collapsed after less than two years of operations in 2008.

Hiring Plans

Hong Kong Air plans to hire 300 staff this year, including 200 cabin crew and 50 pilots, Yang said. The carrier received more than 2,000 applications from pilots last year, so it isn’t concerned about meeting its hiring targets, he said.

The airline also intends to begin hedging as much as 33 percent of its fuel usage after recently acquiring a trading company, Yang said. The carrier had planned to start hedging, which helps guard against jumps in fuel prices, even before crude rose above $100 barrel because of political unrest in the Middle East, he said. Oil prices will likely decline from this level, he said.

“The high crude prices are only temporary,” he said. “It’s just because of political reason -- not supply and demand factors -- and it won’t weigh on our profits.”

--Editors: Neil Denslow, Tan Hwee Ann

http://www.businessweek.com/news/2011-03-14/hong-kong-air-woos-private-equity-funds-cathay-passengers.html

Glencore Said Near to Hiring Eight Banks for Initial Sale
By Zijing Wu - Mar 22, 2011 11:31 AM ET

Glencore Said Near to Hiring Eight Banks for $10 Billion IPO

Glencore International AG, the largest commodities trader, is close to hiring eight banks to manage its $10 billion initial public offering in London and Hong Kong, according to two people with knowledge of the transaction.

Bank of America Corp. (BAC), Barclays Plc (BARC), BNP Paribas (BNP) SA, Societe Generale (GLE) SA and UBS AG (UBSN) may be named IPO bookrunners in addition to lead managers Citigroup Inc. (C), Credit Suisse Group AG (CSGN) and Morgan Stanley (MS), said the people, who declined to be identified because the information is private. Additional banks, including Liberum Capital Ltd., may be appointed with a lesser role, according to the people.

While a final decision hasn’t been made on the timing of the IPO, Glencore may press ahead as soon as April because preparatory work may be completed by end of this month, said the people.

Simon Buerk, a spokesman for Baar, Switzerland-based Glencore, declined to comment. A spokeswoman at Bank of America and spokesmen for Citigroup and SocGen declined to comment. Spokespeople for the other banks weren’t immediately available.

The value of Glencore’s 10 largest listed mining holdings have fallen as much as 12 percent to $27.8 billion from its February peak after Japan’s nuclear crisis. The value of the holdings rebounded to $29.6 billion as of 2:30 p.m. London time today.
Mining Holdings

Glencore’s holdings include a 34 percent stake in Xstrata Plc (XTA) and an 8.8 percent interest in United Co. Rusal, the largest aluminum producer, according to its Dec. 31 annual report to bondholders obtained by Bloomberg News. The MSCI World Index of stocks is rising for a fourth-straight day, posting a 4.1 percent gain from its close on March 16.

Banks that underwrite equity sales in the U.K. and Hong Kong receive fees averaging 2.5 percent of the amount raised, according to data compiled by Bloomberg since 2005. At that rate, Glencore would pay $250 million to its IPO managers if the sale raises $10 billion, the amount the company was said to be seeking.

Larger stock offerings typically pay a smaller percentage to underwriters. Essar Energy Plc paid 2.25 percent to managers of its 1.3 billion-pound ($2.1 billion) London IPO last year, Bloomberg data show.

http://www.bloomberg.com/news/2011-03-22/glencore-said-to-be-near-hiring-eight-banks-for-10-billion-public-offer.html

Li Ka-Shing’s REIT to Start First Hong Kong Yuan IPO Today
By Fox Hu and Zijing Wu - Mar 22, 2011 1:23 PM ET

Billionaire Li Ka-shing’s real estate investment trust will begin gauging investors’ interest for Hong Kong’s first yuan-denominated initial public offering today, according to terms for the sale.

Hui Xian, as the REIT is called, will sell about 2.7 billion existing shares, or 40 percent of the company in the IPO, giving the stock a market capitalization of about 28 billion yuan ($4.3 billion), according to a sales document obtained by Bloomberg News. About 80 percent of the shares will be offered to institutional investors and the rest to Hong Kong’s retail investors, the terms show.

The sale may pave the way for other Hong Kong developers to follow with similar offerings as Hong Kong Exchanges & Clearing Ltd. seeks to widen its product offerings to compete in the region. Hong Kong Exchanges & Clearing Ltd. Chief Executive Officer Charles Li has proposed allowing yuan-denominated share sales in the city. Chinese-currency deposits at Hong Kong banks reached a record 370.6 billion yuan in January, according to Hong Kong Monetary Authority data.

The IPO is backed by the Oriental Plaza property in central Beijing, the terms show. Oriental Plaza, covering 100,000 square meters (1.1 million square feet), is situated along Beijing’s Changan Avenue. It consists of eight premium office towers, a shopping mall, a Grand Hyatt Hotel and serviced apartments, according to its website.
Oriental Plaza

Cheung Kong Holdings Ltd. (1), the Hong Kong developer controlled by Li, owns 33.4 percent of Oriental Plaza, while affiliate Hutchison Whampoa Ltd. (13) holds 18 percent, according to the companies’ 2009 annual report.

BOC International Holdings Ltd., Citic Securities International Co. and HSBC Holdings Plc (HSBA) are managing the initial offering, the terms show.

Managers for the IPO are scheduled to take orders for the IPO from March 30 through April 11, according to the terms. A listing is expected to be on April 19, terms show.

http://www.bloomberg.com/news/2011-03-22/li-ka-shing-s-reit-to-start-first-hong-kong-yuan-ipo-today-1-.html

First Africa firm in HK debut
Mandy Lo and agencies
The Standard
Wednesday, March 23, 2011

South African miner LontohCoal plans to raise between US$300 million (HK$2.34 billion) and US$500 million in a Hong Kong initial public offering in the second half, president and chief executive Tshepo Kgadima said.

Set to be the first African company to list in the SAR market, LontohCoal is looking to introduce strategic investors to raise US$30 million before the IPO, sources said.

Two pre-IPO investors are interested in pouring in US$100 million, the sources said.

The company will launch a secondary listing in Johannesburg in the fourth quarter, Kgadima said.

LontohCoal aims to tap the China market through the Hong Kong listing, looking to supply 80 percent of its coking coal output to the mainland, Kgadima said. But it has yet to sign any offtake agreements with mainland customers.

Lontoh owns three coal mining projects in South Africa, and has a 51-percent stake in a Zimbabwe mine.

Their reserves total 7 billion tons of coke, anthracite and thermal coal.

Meanwhile, Hilong Holdings and Zhengye International scrapped their listings to raise HK$1.48 billion and HK$241 million, respectively, on lackluster market response.

Mainland property developer Top Spring International (3688) recorded zero gray market transactions yesterday, according to Phillip Securities.

It raised HK$1.56 billion after pricing the flotation at HK$6.23 per share, the bottom of the indicative range of HK$6.23 to HK$8.10 apiece. Net proceeds amounted to HK$1.4 billion.

China Kingstone Mining (1380) rebounded 16 percent to HK$2.31, above the offer price of HK$2.25, after dropping 12 percent to HK$1.98 on its trading debut on Friday.

Hong Kong IPO Market Keeps Up Strength
24 March 2011
The Wall Street Journal Online

HONG KONG — Hong Kong's market for initial public offerings showed no sign of slowing Thursday, as a Shanghai-listed construction machinery maker laid plans to raise US$2 billion-US$3 billion and a unit of a Chinese state-owned group raised US$658 million, people familiar with the deals said.

Sany Heavy Industry Co., the construction equipment company, aims to list in Hong Kong in the first half of the year, people familiar with the deal said Thursday. Sany said last April it was planning a Hong Kong listing, but it gave no timeframe.

Its IPO will be among the biggest this year in Hong Kong, joining the up to US$10 billion Hong Kong-London listing of Swiss commodities trader Glencore International AG.

Investors will likely compare Sany's valuations with another Chinese machinery maker, Changsha Zoomlion Heavy Industry Science & Technology Development Co., which raised US$1.68 billion in an IPO in Hong Kong in December.

Since listing, Zoomlion shares are up roughly 30% from its offer price, at HK$19.40 midday Thursday. The shares have benefited from booming demand in China for machinery products.

China's construction machinery sector will have another five to seven years of fast growth, BNP Paribas said in a research report this month, driven by China's rising urbanization rate, the need to rely on either public or commercial housing to raise the effective housing supply and the tendency to shift to machinery as a replacement for manual labour amid rising labour costs.

Sany Heavy's parent, Sany Group Co., was in the headlines five years ago, when it tried to block a bid by U.S. private equity fund Carlyle Group LP for Xugong Group Construction Machinery Co., in a widely publicized private equity transaction.

Meanwhile, Far East Horizon Ltd., a financial-leasing unit of state-owned Sinochem Group, raised US$658 million by pricing its Hong Kong IPO in the middle of an indicative price range, a person familiar with the situation said Thursday.

Far East Horizon, which provides equipment-based financial leasing to industries ranging from health care and shipping to printing and machinery, sold 816 million shares at 6.29 Hong Kong dollars (80.7 U.S. cents) each, the person said. The indicative price range was HK$5.20-HK$6.80, according to the company's prospectus.

The company will start trading March 30 on the Hong Kong stock exchange.

Separately, shares of China Hongqiao Group Ltd. were up 2.2% midday Thursday in their trading debut, outperforming the market. The Chinese aluminum producer had raised US$817 million from its IPO, the biggest IPO in Hong Kong so far this year. Hong Kong's Hang Seng Index was up 0.76%.

But analysts said that even though the IPOs were doing relatively well, uncertainty remained in the market about new share offerings.

"Hongqiao's shares are trading above their offer price, but that doesn't mean investor interest in IPOs is particularly keen—uncertainty ranging from Japan's earthquake to high oil prices continue to weigh on sentiment," said Castor Pang, research director of Cinda International.

Singapore's CapitaMalls Asia seeks secondary listing in Hong Kong

SINGAPORE, March 28 (Reuters) - Singapore-based shopping mall developer CapitaMalls Asia said it is seeking a secondary listing in Hong Kong to bolster its expansion plans in China.

The company, a unit of property developer CapitaLand, has submitted an application to the Hong Kong stock exchange, it said.

CapitaMalls said it has sufficient resources to fund its expansion and has no immediate need to raise equity, but the listing would allow it greater flexibility to manage its capital.

The move comes as many Singapore-listed companies, such as Yangzijiang Shipbuilding, have been seeking to list in Hong Kong or Taiwan in a bid to seek higher valuations and widen their investor base.

China's strong economic growth, along with its investments to strengthen its railway infrastructure and public transport systems, is expected to help boost the retail industry and demand for shopping mall space.

"Given the growing importance of its China business going forward, the proposed secondary listing will complement CapitaMalls Asia's expansion in the country," the company said in a statement.

China accounts for about 37 percent of CapitaMalls' total property portfolio by property value and 70 percent by gross floor area. It owns 53 malls across 34 cities in China, the company said.

"With its increasing disposable income and urbanisation, we remain confident that China will continue to experience strong retail sales growth," Liew Mun Leong, Chairman of CapitaMalls Asia said in a statement.

China International Capital Corporation Hong Kong Securities and J.P. Morgan are the joint sponsors of the proposed secondary listing.

Shares of CapitaMalls, which owns S$23.7 billion worth of assets in Singapore, China, Malaysia, Japan and India, are down about 9 percent since the start of the year.

The shares, however, gained almost 3 percent on Friday on market talk of a secondary listing.

The company requested for trading in its shares to be halted earlier on Monday.

Yuanda To Seek US$500M HK IPO OK; Japan's SBI Launches US$328M HK IPO
28 March 2011
By Prudence Ho
Of Dow Jones Newswires

HONG KONG (Dow Jones)--Shenyang Yuanda Aluminium Industry Engineering Co. is planning to seek listing approval from the Hong Kong stock exchange's listing committee on April 7 for its planned US$400 million-US$500 million Hong Kong initial public offering, a person familiar with the situation said Monday.

The listing plan of the Chinese company comes as Tokyo-listed SBI Holdings Inc. (8473.TO) is seeking to raise up to US$328 million in an IPO before listing in Hong Kong on April 14, according to a term sheet seen by Dow Jones Newswires on Monday, in the first listing by a Japanese company in Hong Kong.

Yuanda Aluminium, established in 1993, makes curtain walls, the outer covering of a building in which the outer walls are non-structural, and also metal roofs, shading systems, and glass skylights, according to the company's web site.

The company, which has total annual production capability of 12 million square meters, built the membrane structure for China's National Stadium, also known as the Bird's Nest, and the National Olympic Swimming Center located in Beijing Olympic Park.

The company has international branches in Japan, Germany, U.S., Australia, Russia, U.K., Singapore, Macau, Canada, India, Bahrain, Qatar, Kuwait and Saudi Arabia, according to its Web site.

J.P. Morgan Chase & Co. and Deutsche Bank AG are the joint bookrunners for Yuanda Aluminium IPO.

Meanwhile, SBI Holdings plans to sell 17.5 million shares in the form of Hong Kong depositary receipts, or HDRs, at a maximum price of HK$145.52 each, the term sheet said.

The final price of the HDRs will be equivalent to a 4%-7% discount to the closing price of the company's Tokyo-listed shares on one of the days from April 6 to April 8, a person familiar with the situation said Monday.

The Tokyo-based financial-to-property conglomerate is set to be the only Japanese company to be listed in Hong Kong, and will only be the second company after Brazil's Vale SA (VALE) to issue HDRs. Unlike Vale, however, which in December listed by introduction, SBI will be raising funds from its listing. HDRs, structured like American Depositary Receipts, allow foreign firms to list in the city from jurisdictions that prohibit share issues or the maintenance of share register overseas. The regulatory framework for HDRs was established in Hong Kong in July, 2008.

CCB International (Holdings) Ltd. and Daiwa Securities Capital Markets Co. are joint bookrunners, the term sheet said.

SBI Holdings and Dow Jones & Co. operate a joint venture, Wall Street Journal Japan KK, which publishes the Japanese-language version of the online edition of The Wall Street Journal.

Billion Industrial Gets Regulator OK For Up To US$500 Mln HK IPO - Source
25 March 2011

HONG KONG (Dow Jones)--Chinese chemical fiber manufacturer Billion Industrial Holdings Ltd. received regulatory approval Thursday for its plan to raise up to US$500 million in an initial public offering ahead of its listing on the Hong Kong stock exchange, a person familiar with the situation said Friday.

Billion Industrial doesn't have a timetable for the IPO, but people familiar with the situation said the company could list shares as soon as April.

The company, which was established in 2003, manufactures and sells fiber products mainly to domestic and overseas textile enterprises, according to its web site.

Bank of AmericaMerrill Lynch, CCB International (Holdings) Ltd. and UBS AG are handling the deal, the people familiar with the situation said earlier.

Hong Kong Targets Business Trust Listings
26 March 2011
The Wall Street Journal Online

HONG KONG—Hong Kong Exchanges & Clearing Ltd. hopes to introduce a framework this year to enable business trusts to list in the city, which would diversify listing avenues and help Hong Kong cement its position as one of the world's largest fund-raising venues.

The bourse operator's plan comes as Hong Kong-listed companies are increasingly seeking business trusts as an alternative to conventional listings, with regional competitor Singapore already allowing business trusts to list.

"HKEx is discussing with the Securities and Futures Commission the possible introduction of a framework for the listing of business trusts that are set up and operated in a manner that fully preserves all of HKEx's current investor protection, disclosure and corporate governance requirements for listed issuers," HK Exchanges Chief Executive Charles Li told reporters on Thursday.

Mr. Li said some issues remained in the bourse operator's discussions with the securities regulator and the government, but he wouldn't elaborate.

"The remaining issues are highly technical but we hope they can be resolved within this year."

Hong Kong allows only real-estate investment trusts to list on its bourse, unlike Singapore, which also allows other types of business trusts to list in the city.

Mr. Li said the controlling trustee of a business trust should be required to hold more than 25% of the units in the trust to protect independent investors.

Under Singapore's business trust laws, the controlling trustee is required to hold only 25% of units in the trust.

HKEx's move comes as Hong Kong-based Hutchison Whampoa Ltd. listed its ports unit in Singapore last week in the form of a business trust.

Hutchison, which is controlled by tycoon Li Ka-shing, said earlier it chose Singapore as the venue for Hutchison Port Holdings Trust's US$6 billion listing partly because Hong Kong doesn't allow listings of business trusts.

The city's dominant fixed-line operator PCCW Ltd., controlled by Li's younger son, Richard Li, said last week it was exploring a separate listing of its telecommunications operations, also in the form of a business trust, and has been in talks with Hong Kong regulators over the plan. The firm declined to say whether it wants to list in Hong Kong or Singapore.

Glencore gets HK nod for planned $10 bln IPO

HONG KONG, April 1 (Reuters) - Glencore International AG, the global commodities trader, has got approval to list from Hong Kong's stock exchange as it prepares an initial public offering which could raise $10 billion, sources said.

The Hong Kong stock exchange approval -- according to sources with direct knowledge of the matter -- does not stipulate any deadline for Glencore to launch the IPO, but it is an important step towards it.

Glencore is considering a dual listing in London and Hong Kong. Amid recent market turmoil Hong Kong's approval is the strongest hint yet that the company will still proceed.

Glencore declined to comment.

Glencore's listing application was considered by the Hong Kong exchange at a scheduled meeting on Thursday.

Glencore, valued earlier this year by one analyst at about $60 billion, is looking to ditch its long-standing partnership structure in favour of continuing as a public company, which would make it easier to reward partners and conduct acquisitions.

The company has kept its listing plans under wraps since briefing analysts last month. It set an April 1 deadline for the sell-side analysts it briefed to complete their research notes.

Glencore is not required to come back to the Hong Kong listing committee unless there are material changes to its situation.

The next key step is the release of Glencore's much-anticipated intention to float document in London, expected by some sources to follow on the heels of the Hong Kong stock exchange approval.

The London leg of the IPO will take longer to complete.

The sources declined to be identified as the IPO discussions were confidential.

A Hong Kong exchange spokesman declined to comment.

CORNERSTONE INVESTORS

Glencore has met with several key potential investors from Asia to the United States to gauge interest for the IPO and the response has been positive, sources previously told Reuters.

If it decides to proceed with the offer, Glencore will aim to launch the retail portion of a Hong Kong IPO in the third or fourth week of April, with a listing scheduled for early to mid May, sources said.

Asia's biggest sovereign wealth funds and some Hong Kong billionaires are seen as likely to invest in the IPO. Such so-called cornerstone investors are common to many large Asian IPOs and are assured a significant portion of the float.

Cornerstone investors usually have a lock-in period of up to one year. They bring more credibility to the IPO, which in turn helps the underwriters to generate more demand for the offer.

Prada has filed IPO papers in Hong Kong -source

MILAN, March 31 (Reuters) - Fashion house Prada has applied for a Hong Kong initial public offering which could value the Italian firm at around 8 billion euros ($11 billion) and allow it to draw Asian investors. The fashion house, known for its cutting-edge Prada bags and colourful Miu Miu dresses, filed on Wednesday an A1 application form with the Hong Kong stock exchange with the aim of floating this summer, a source close to the operation told Reuters on Thursday. Prada declined to comment.

If successful, the much-awaited IPO would make Prada the first Italian company to list in Hong Kong and the biggest European fashion brand to float in more than a decade.

Prada has not given a timeframe for the share offering. It has put on hold its plans to come to the market at least three times over the last decade because of market turbulence.

Another source close to the operation told Reuters the IPO could take place in early July.

"The IPO process is going ahead as planned," the source said, asking not to be identified.

Prada would join other companies such as Russian aluminium maker UC RUSAL and French skincare products retailer L'Occitane who have looked to raise funds from the Hong Kong market and to benefit from higher valuations.

The Asia and Pacific region is Prada's fastest-growing market. The fashion house, run by Patrizio Bertelli and his wife and designer Miuccia Prada, has about a third of its 326 directly operated stores in the region.

Prada, which also owns the Car Shoe footwear brand, could raise at least 1.6 billion euros from the sale of about 20 percent of its shares, two other sources close to the issue said on Wednesday. [ID:nL3E7EU1N3]

The company could seek a valuation of around 15 times 2010 core earnings, above the 12.5 times average of the luxury sector, the sources said.

($1=.7035 Euro)

Hui Xian REIT set to debut first yuan IPO
The Standard
Monday, April 11, 2011

You can be part of history for 5,580 yuan (HK$6,634.79).

That is the cost of one board lot of Hui Xian Real Estate Investment Trust (87001) - Hong Kong's first initial public offering priced in yuan.

Cheung Kong Holdings (0001) - Hui Xian's parent firm - opens the issue up for subscription from today.

Retail investors have until April 19 to subscribe. The REIT is expected to start trading from April 29.

Application forms will be available in more than 100 branches of BOC HK, HSBC, Standard Chartered, Bank of East Asia, Hang Seng Bank and CITIC Bank.

The REIT is being offered between 5.24 yuan and 5.58 yuan apiece, and traded as 1,000 units per board lot. It is forecast to pay annual yield of about 4 percent to 4.26 percent.

The issue is expected to raise between 10.48 billion yuan and 11.16 billion yuan by offering two billion units - 20 percent of which is for local retail investors and the rest for institutional investors. The funds will help repay the company's existing debt of 11.69 billion yuan.

Hui Xian's main asset is the Beijing Oriental Plaza, an 800,000-square- meter complex with a shopping mall, hotel, service apartments and offices.

It owns the complex with a local partner under a joint venture that expires in 2049.

"We will still have 38 years of income generated by the complex. It is hard to say whether the joint venture will be extended at this point," said Kam Hing-lam, chairman of Hui Xian Asset Management.

But Champlus Asset Management director Ricky Tam Siu-hing thinks Hui Xian's valuation is too high.

"The market capitalization is expected to be around 20 billion yuan versus the company's pricing of 26.2-27.9 billion yuan," he said.

Tam advised local investors not to take margin loans as the higher value of the yuan versus the Hong Kong dollar may entail a 1 percent conversion loss.

First Shanghai Securities chief analyst Linus Yip Sheung-chi urged investors to focus more on performance of the REIT rather than yuan appreciation gains.

With an expected 5 percent yuan appreciation versus the local currency, the total annualized return would range between 9 and 9.26 percent.

Brokerages, meanwhile, have drawn more than 1.16 billion yuan in margin financing orders for Hui Xian's IPO. And around 42.7 billion yuan has been earmarked for these orders.

Coach mulling Hong Kong listing - report

NEW YORK, April 7 (Reuters) - Upscale handbag and accessories maker Coach Inc may list shares on the Hong Kong stock exchange , according to a report by Thomson Reuters publication IFR.

The New York-based company has had preliminary talks with investment banks and is considering whether to simply list its shares in Hong Kong or to sell new shares in the listing, according to IFR, citing two sources.

A Coach spokeswoman declined to comment, citing company policy on market speculation.

One of the sources cited by IFR said a Hong Kong listing would be part of Coach's efforts to build its brand in China.

Coach operates 56 stores in China and generates about 5 percent of its sales there. The company expects that to jump to 10 percent by 2014.

Coach shares will continue to trade on the New York Stock Exchange, where they have been listed since Coach's 2000 initial public offering.

Italian fashion house Prada is seeking to raise as much as 1.6 billion euros ($2.28 billon) through an initial public offering on the Hong Kong bourse, sources told Reuters in March.

Russian aluminum maker UC RUSAL and French skincare products retailer L'Occitane have also looked to raise funds from the Hong Kong market.

($1= 0.7014 euros)

FACTBOX-Process for new listings in London, Hong Kong

April 10 (Reuters) - Swiss-based commodities trader Glencore [GLEN.UL] is expected to launch a $10 billion London and Hong Kong initial public offering (IPO) in mid-April.

The process in the two jurisdictions differs in both length and structure, but the dual offering is expected to be completed around the same time so the London portion will begin first.

Below is the usual IPO timetable for London and Hong Kong:

LONDON

There is no formal IPO timetable, but most companies choose to follow the month-long "two plus two" format.

Glencore may decide to be more creative on timing as its offer period is likely to coincide with several public holidays in both Europe and other parts of the world, and it has already held many pre-IPO meetings with potential investors.

DAY 1 -- Intention to float announced, research published

* A listing usually officially kicks off with an intention to float (ITF) announcement, which can detail things such as timing, the amount to be raised, existing share holdings and information on a firm's finances and operations.

* On the same day as the ITF, analyst research into the company is published.

DAY 1-14 -- Two weeks of pre-marketing

* The publication of research is usually followed by around two weeks of pre-marketing, also known as investor education, in which investors are taken through the analyst research.

DAY 15 -- Price range

* The issuer, in partnership with its investment bank advisers, sets a price range at which it will offer its shares, taking into account things such as analyst valuation estimates and feedback from investors during pre-marketing.

* A pathfinder prospectus is published at this stage.

DAY 15-30 -- Two weeks of bookbuilding, roadshows

* Books on the offer open. Management embark on roughly two weeks of roadshows, visiting investors all over the world to drum up demand, while bankers build the order book and look to narrow down where within the range the offer should price.

DAY 30 -- Final pricing and allocation

* The final price of the shares is decided and they are allocated to investors. Shares usually begin conditional trading on the same day as the final price is announced.

HONG KONG

There is no formal announcement when a company launches its listing in Hong Kong, and issuers can go ahead with an IPO at any point after they have received approval from the stock exchange listings hearing committee.

DAY 1 -- Listing document published

* The IPO starts with the publication of a company's listing document, which details information such as financials, strategy, competitors. After submitting a series of documents to the exchange, the company can go ahead with filing a prospectus with more details of the offering.

There is no fixed timeline for publishing the prospectus, but before 11 a.m. on the day it is published the company has to get authorisation to register the prospectus and file two copies of the prospectus with regulators.

DAY 1-14 -- Two weeks of pre-marketing

* Similar to in the London process, the company then spends around two weeks doing pre-marketing.

DAY 15-22 -- Eight-day roadshow

* The order books open on the institutional portion of the offering. An eight-day roadshow by company management begins.

DAY 19 -- Retail offer opens

* The retail portion of the listing, known as the Hong Kong Public Offer, begins four days after books are opened to institutional investors.

DAY 22 -- Pricing

* The institutional and retail offerings close on the same day. The offer is priced on the last day of the bookbuild and shares usually begin trading the following week.

Handbag retailer Milan Station eyes $35 mln HK IPO -paper
4 May 2011

HONG KONG, May 4 (Reuters) - Milan Station, a handbags retailer, is seeking to raise up to HK$270 million ($34.7 million) in an initial public offering in Hong Kong later this month, the South China Morning Post reported on Wednesday.

The Hong Kong-based retailer, which operates 14 outlets under the name Milan Station and France Station in Hong Kong, Macau and Beijing, plans to set up 24 new outlets in major Chinese cities, including Beijing, Shanghai, Guangzhou, Chengdu, and Hangzhou, in the next two years tapping the cash-rich mainlanders' appetite for luxury products, the paper said.

Milan Station, which sells new and second hand-hand designer hangbags from brands such as Hermes, Chanel, Louis Vuitton and Gucci, estimated the size of the Hong Kong designer handbag market at HK$9.6 billion in 2009 of which 45 percent of sales were from mainlanders, the paper said citing a pre-listing prospectus.

The firm aims for a flotation by the end of this month, the paper added. It gave no further listing details.

Tapping the growing appetite for luxury products in China, many luxury brands including Italian fashion house Prada, upscale handbag and accessories maker Coach Inc , and British luxury shoemaker Jimmy Choo, are eyeing a listing in Hong Kong.

Samsonite aims for end-May listing hearing for HK IPO-IFR
7 May 2011

HONG KONG, May 7 (Reuters) - Luggage maker Samsonite is aiming for an end-May listing hearing with the Stock Exchange of Hong Kong, IFR reported on Friday, part of a preparation for an initial public offering (IPO).

Before launching an IPO, all companies need to meet the exchange to get a formal approval from its listing committee to go public.

Luxembourg-based Samsonite, owned by private equity firm CVC and Royal Bank of Scotland following a debt restructuring last year, is expected to raise up to $1.5 billion, said IFR, a Thomson Reuters unit.

The firm has picked Goldman Sachs Group Inc, HSBC Holdings Plc and Morgan Stanley as joint global co-ordinators for the planned Hong Kong IPO.

Royal Bank of Scotland Plc and UBS AG have been named joint book runners.

Coach plans dual listing of shares on Hong Kong Stock Exchange to raise profile in Asia
10 May 2011

NEW YORK (AP) - Luxury handbag maker Coach Inc. said Tuesday that it is planning a dual listing on the Hong Kong Stock Exchange in order to raise awareness of its brand in Asia.

Coach, which is listed on the New York Stock Exchange, plans to issue Hong Kong Depository Receipts. No additional shares will be issued and no capital will be raised through the new listing.

"This listing, if approved, will raise awareness of the Coach brand among investors and consumers in the China market as well as throughout Asia," said CEO Lew Frankfort.

Coach makes about a fifth of its sales in Japan. China is a smaller market for Coach but it is also its fastest growing region.

Coach has 55 stores in China and it is seeking to add 11 more by the end of the year and 30 each year after that. Coach operates 174 stores in Japan.

New York-based Coach said it will file a listing application with the Hong Kong Stock Exchange. If approved, a listing could occur before the end of the year. Coach said it believes it would be the first time a U.S. domestic issuer has done a secondary listing in Hong Kong.

Shares rose 48 cents to $60.45 in midday trading.

Retailers Seek Billions in Hong Kong IPOs
24 May 2011
The Wall Street Journal Asia

HONG KONG -- Retailers continued their moves to tap billions of dollars from Hong Kong investors, as Italian fashion house Prada SpA took further steps Monday toward its planned $2 billion initial public offering and local jewelry retailer Chow Tai Fook prepared to raise US$3 billion to US$4 billion in an offering next year.

Meanwhile, luxury second-hand handbag retailer Milan Station Holdings Ltd. surged 66% on its Hong Kong trading debut Monday amid a surge of interest from mom-and-pop investors.

Jewelry seller Chow Tai Fook aims for a Hong Kong IPO in the first quarter of 2012, people familiar with the situation said Monday. The retailer is an arm of Chow Tai Fook Enterprises Ltd., a conglomerate controlled by Hong Kong property magnate Cheng Yu-Tung. It was unclear Monday whether just the jewelry retailer or other arms of the company would be involved.

J.P. Morgan Chase & Co., HSBC Holdings PLC, Goldman Sachs Group Inc., Deutsche Bank AG, Citigroup Inc., Credit Suisse Group, and UBS AG have been appointed to handle the IPO, said the people familiar with the matter.

Meanwhile, Prada, which has failed several times over the last decade to list its shares, started informal meetings with investors Monday to gauge interest in its plan to sell more than 423 million shares.

Presentations to institutional investors will kick off June 6, and about 86% of the shares to be sold will come from the company's existing shareholders, according to a term sheet seen by Dow Jones Newswires on Monday.

Prada, which received regulatory approval for its planned IPO last week, plans to start its Hong Kong public offering on June 14 and price the deal on June 17, the term sheet said. The timetable is preliminary and is subject to changes depending on market conditions. Goldman Sachs, Intesa Sanpaolo SpA unit Banca Imi, Unicredit SpA and Credit Agricole SA are handling Prada's IPO

Prada and Chow Tai Fook join U.S. luggage maker Samsonite Corp. in planning to list in Hong Kong as retail-focused companies seek to build up their brand in China's booming consumer market and also tap investors in one of the world's top venues for IPOs in recent years. Samsonite will begin selling its $1 billion IPO to institutional investors on May 30 and is scheduled to list in Hong Kong on June 16, people familiar with the situation said.

Other foreign retailers that plan to list in Hong Kong in the coming months include Japanese clothing retailer Baroque Japan Ltd. and hypermarket operator Sun Art Retail Group Ltd., a joint venture between Taiwanese supermarkets-to-cement conglomerate Ruentex Group and France's Groupe Auchan SA.

World-wide sales of luxury goods are surging this year, fueled by double-digit growth in China and a resurgence in the more mature markets of the U.S. and Europe, according to a study from consulting firm Bain & Co. Mainland China will continue to be the fastest-growing market for luxury items and will rank as the third-largest market in this category in five years, Bain said.

Prada is planning to use the proceeds from its IPO to expand its sales network, increase floor space, repay bank loans and supplement working capital, according to the term sheet.

Prada owns the eponymous luxury label as well as the younger, sassier Miu Miu fashion line and upscale Church's shoe brand. The company is 95%-owned by designer Miuccia Prada, her husband, Patrizio Bertelli, and other family members. The company booked sales of <euro>2.05 billion ($2.9 billion) in the fiscal year ended Jan. 31, up 31% from a year earlier, while net profit more than doubled to <euro>250.8 million from <euro>100.2 million.

In 2006, Italian bank Intesa Sanpaolo acquired a 5% stake in Prada for <euro>100 million, valuing the entire company at <euro>2 billion at that time.

Milan Station, founded by Hong Kong businessman Yiu Kwan Tat, saw the retail tranche of its IPO oversubscribed 2,178.5 times, meaning demand exceeded the number of shares available by that many times. Because of the heavy oversubscription, 50% of the IPO went to retail investors, up from 10% originally. The retailer of luxury second-hand bags sold 162.5 million shares, or 25% of its share capital, raising 271 million Hong Kong dollars (US$34.9 million).

The company's shares closed 66% higher at HK$2.77, up from the IPO price of HK$1.67, after hitting an intraday high of HK$2.96. With 284.7 million shares traded, the company was the day's sixth most heavily traded stock.

Hong Kong-based Milan Station operates 14 retail shops under the Milan Station and France Station brand names in Hong Kong, Macau and China, according to its listing prospectus.

Separately, Beijing Jingneng Clean Energy Co., a clean-energy unit of the Beijing municipal government, received regulatory approval Thursday for its plan to launch an IPO to raise US$500 million to US$700 million ahead of a listing on the Hong Kong stock exchange in July, a person familiar with the situation said Monday.

Goldman Sachs and Bank of China International Holdings Ltd. are handling Beijing Jingneng's IPO.

Glencore Down 2.8% On HK Debut; Euro-Zone, Commodity Demand Worries Weigh
25 May 2011

HONG KONG (Dow Jones)--Commodities giant Glencore International PLC (0805.HK) fell as much as 3% on its Hong Kong stock exchange debut Wednesday, weighed by concerns over debt problems in the euro zone and the impact on commodities demand from slower growth in China.

At 0403 GMT, Glencore was trading at HK$65.25, down 1.9% from its initial public offering price of HK$66.53, after hitting an intraday low of HK$64.55. The benchmark Hang Seng Index was down 0.6% at 22,605.

Glencore, which raised $10 billion from an initial public offering in Hong Kong and London last week, comes to the market as investors across the globe are reassessing commodity prices after a long-running rally driven by increased consumption of raw materials in developing markets.

Glencore Chief Executive Ivan Glasenberg said Wednesday that the underlying fundamentals of the commodities market remain strong, despite the recent market correction, amid a tightening of supply following floods in Queensland earlier this year. He reiterated the company has a bullish view on the commodities market because of strong demand from Asia, particularly China.

Demand from China may slow due to Beijing's measures to cool an overheating economy, Glasenberg said, but added that the country will still "demand a lot of commodities which we produce and trade." China consumes around 15% of the world's production of commodities, he said.

The commodities firm's IPO has a 10% overallotment option that would bring the total raised from the dual offering to $11 billion. Glencore had a market capitalization of around $59 billion before the start of trading Wednesday.

On its first day of unconditional trading on the London Stock Exchange On Tuesday, Glencore ended at 525 pence, translating to about HK$66.05, up from the conditional closing price of 514 pence Monday, but still below its 530-pence issue price set last week.

The company is a 37-year-old natural-resource conglomerate that produces and trades commodities such as oil and sugar. It also owns physical assets, such as ships and mines, and holds stakes in publicly traded companies, most notably Anglo-Swiss miner Xstrata PLC. Glencore's employees, previously its sole owners, now own 83% of the company's shares subject to certain lockup periods.

New China Life Adds CICC, HSBC, JP Morgan, Bank of AmericaMerrill Lynch To Underwrite Hong Kong, Shanghai IPO - Sources
24 May 2011

HONG KONG -(Dow Jones)- New China Life Insurance Co., China's third-largest life insurer by premiums, has added China International Capital Corp., J.P. Morgan Chase & Co. (JPM), HSBC Holdings PLC (HBC) and Bank of AmericaMerrill Lynch to join UBS AG to handle its up to US$4 billion dual listing in Shanghai and Hong Kong, people familiar with the situation said Tuesday.

The insurer plans to hold the dual listing in the second half of the year, one of the people said.

New China Life had gross written premiums of US$13.8 billion in 2010 and a compound annual premium growth rate of 40% from 2005 to 2010, giving it an 8.9% share of the Chinese life insurance market as of December 2010, according to a mainland industry body, the China Insurance Regulatory Commission.

Global Finance: Prada Moves Toward Hong Kong IPO
24 May 2011
The Wall Street Journal

HONG KONG -- Retailers continued their moves to tap billions of dollars from Hong Kong investors, as Italian fashion house Prada SpA took further steps Monday toward its planned $2 billion initial public offering and local jewelry retailer Chow Tai Fook prepared to raise US$3 billion to US$4 billion in an offering next year.

Meanwhile, luxury second-hand handbag retailer Milan Station Holdings Ltd. surged 66% on its Hong Kong trading debut Monday amid a surge of interest from mom-and-pop investors.

Jewelry seller Chow Tai Fook aims for a Hong Kong IPO in the first quarter of 2012, people familiar with the situation said Monday. The retailer is an arm of Chow Tai Fook Enterprises Ltd., a conglomerate controlled by Hong Kong property magnate Cheng Yu-Tung. It was unclear Monday whether just the jewelry retailer or other arms of the company would be involved.

J.P. Morgan Chase & Co., HSBC Holdings PLC, Goldman Sachs Group Inc., Deutsche Bank AG, Citigroup Inc., Credit Suisse Group, and UBS AG have been appointed to handle the IPO, said the people familiar with the matter.

Meanwhile, Prada, which has failed several times over the past decade to list its shares, started informal meetings with investors Monday to gauge interest in its plan to sell more than 423 million shares. Presentations to institutional investors will kick off June 6, and about 86% of the shares to be sold will come from the company's existing shareholders, according to a term sheet seen by Dow Jones Newswires on Monday.

Prada, which received regulatory approval for its planned IPO last week, plans to start its Hong Kong public offering on June 14 and price the deal June 17, the term sheet said. The timetable is preliminary and is subject to changes depending on market conditions. Goldman Sachs, Intesa Sanpaolo SpA unit Banca Imi, Unicredit SpA and Credit Agricole SA are handling Prada's IPO

Prada and Chow Tai Fook join U.S. luggage maker Samsonite Corp. in planning to list in Hong Kong as retail-focused companies seek to build their brand in China's booming consumer market and also tap investors in one of the world's top venues for IPOs in recent years. Samsonite will begin selling its $1 billion IPO to institutional investors on May 30 and is scheduled to list in Hong Kong on June 16, people familiar with the situation said.

Other foreign retailers that plan to list in Hong Kong in the coming months include Japanese clothing retailer Baroque Japan Ltd. and hypermarket operator Sun Art Retail Group Ltd., a joint venture between Taiwanese supermarkets-to-cement conglomerate Ruentex Group and France's Groupe Auchan SA.

Husky Energy may list in Hong Kong
CALGARY— The Canadian Press
Published Monday, May. 30, 2011 10:01AM EDT
Last updated Monday, May. 30, 2011 10:07AM EDT

Husky Energy Inc. (HSE-T29.370.170.58%) says it's looking at a secondary stock listing in Hong Kong.

The Calgary-based oil and gas company, which is controlled by Hong Kong billionaire Li Ka-Shing, said Monday its board has not made any final decisions about the secondary listing.

The company, which is active in gasoline retailing, refining, oil sands production and offshore exploration and production, said it will keep its primary listing on the Toronto Stock Exchange.

Among Husky's holdings is the Liwan Gas project offshore of China.

“The South East Asia region has been identified as a pillar of growth for the company and we are advancing several multibillion-dollar projects as part of our strategic plan,” said chief executive officer Asim Ghosh in a release.

“A Hong Kong listing could provide investors in this important capital market with easier access to participate in our business strategy.”

Husky has operations in Western Canada, off Canada's East Coast and in southeast Asia. It also has refineries, and a chain of fuel stations across Canada.


http://www.theglobeandmail.com/globe-investor/husky-energy-may-list-in-hong-kong/article2039697/


Samsonite May Raise as Much as $1.5 Billion in IPO of Shares in Hong Kong
By Fox Hu - May 30, 2011 1:29 AM ET

Samsonite International SA, the luggage maker backed by London-based CVC Capital Partners Ltd., may raise as much as HK$11.7 billion ($1.5 billion) in an initial public offering in Hong Kong, a sale document showed.

Samsonite and investors are offering 671.2 million shares in Hong Kong at HK$13.50 to HK$17.50 each, according to a term sheet obtained by Bloomberg News. The company plans to set a final price for the IPO on June 9 and start trading on June 16, the terms show.

The 101-year-old company will list shares in Hong Kong ahead of Coach Inc. and Prada SpA as consumer-goods makers seek to boost market share in China, where rising affluence is bolstering spending on foreign goods. Beauty-products maker L’Occitane International SA (973) has jumped 37 percent since its Hong Kong IPO in April last year.

“Brand-name companies targeting mainland Chinese consumers have good growth prospects in the long term as China’s economy continues to grow fast,” said Nelson Yan, who helps oversee $90 million as investment manager at Mayfair Pacific Financial Group in Hong Kong. “Samsonite’s valuation is relatively attractive compared to listed luxury goods makers.”

The price range represents 17 to 22 times Samsonite’s estimated 2011 earnings, as estimated by banks arranging the sale. Six luxury-goods companies listed in Asia, including L’Occitane and women’s shoe retailer Belle International Holdings Ltd., trade at an average of 26.2 estimated 2011 earnings, according to a note from Goldman Sachs Group Inc. (GS)
Grabbing China Share

Existing shares account for 82 percent of Samsonite’s IPO, the terms show. Goldman Sachs, HSBC Holdings Plc (HSBA), Morgan Stanley (MS) and Royal Bank of Scotland Group Plc (RBS) are managing the offering.

Samsonite, which sells luggage under the Samsonite and American Tourister brand, said China has the largest potential for growth as the company plans to open stores in 140 cities.

The Mansfield, Massachusetts-based company aims to boost market share in China to as much as 35 percent within five years from 12.5 percent currently, Ramesh Tainwala, the company’s president for the Asia-Pacific region and the Middle East, told reporters in Hong Kong on May 24. Sales in China rose 50 percent last year, he said.

Samsonite was bought by CVC, a private equity firm, for about $1.7 billion in October 2007. Its U.S. retail division, Samsonite Co. Stores, in 2009 sought bankruptcy protection from creditors after the financial crisis caused a slump in demand for travel-related products.

The company started as Shwayder Trunk Manufacturing in Denver in 1910, with Samson as its first brand. The first Samsonite-brand suitcase was introduced 29 years later, according to Hoover’s, Inc.


http://www.bloomberg.com/news/2011-05-30/samsonite-will-sell-ipo-shares-at-hk-13-50-to-hk-17-50-each-terms-show.html

Palmer’s Fourth Failed IPO Bid Shows Hong Kong Not Swayed by Resourcehouse
By Rebecca Keenan and Elisabeth Berhmann - Jun 5, 2011 10:01 AM ET

Australian billionaire Clive Palmer’s much-touted ties with China weren’t enough to convince Hong Kong investors to put up $3.6 billion for shares in his unprofitable iron ore and coal company Resourcehouse Ltd.

Resourcehouse dropped its fourth attempt in two years at an initial public offering in the city on June 4, citing negative global market conditions. The axing came after the company cut the price as much as 30 percent the day before.

Palmer, who says he’s been to China more than 50 times and in 1962 met Pu Yi, the last Emperor, marketed the float around his ties to China and Asia’s demand for the raw materials he plans to mine. Glencore International Plc, the world’s largest commodities trader that listed in Hong Kong last month, had to scale back investors’ share requests because the offer was oversubscribed.

“It is a blow to his reputation,” Cameron Peacock, a market analyst at IG Markets in Melbourne, said by phone. “He’s always talking about how strong his relations are with Asia and China. It is going to leave some people wondering ‘are the depths of your relationships as strong as you’ve made them out to be?’”

Hong Kong IPOs have raised at least $8.9 billion so far this year, up 55 percent on a year earlier, according to data compiled by Bloomberg. The number of basic material companies worldwide conducting IPOs has risen by 32 percent. They’ve raised $17.3 billion so far this year, up 77 percent on last year, led by Glencore.

Glencore, which has a 34 percent stake in mining company Xstrata Plc, grew its profit nearly fourfold since 2008 and last year had net income of $3.8 billion, according to data compiled by Bloomberg. It may report 2011 net income of $7.3 billion, according to Nomura International Plc.
Unprofitable Outlook

In contrast, Brisbane, Australia-based Resourcehouse, said in its prospectus that it won’t turn a profit until output at its coal and iron ore projects begins in 2014 or 2015.

“Glencore is a fantastic business and it has been well- managed and it will do well over the medium to longer term,” Gavin Wendt, a senior resource analyst at Mine Life Ltd. in Sydney, said by phone. “With Resourcehouse, the constant ‘will they, won’t they?’ and the withdrawing of the issue just does nothing for their market credibility.”

The pulling of the IPO follows iron ore prices falling 11 percent from their peak in China this year and a plunge on global stock markets. Commodities prices have fallen 8 percent from this year’s high on April 8, according to the Standard & Poor’s GSCI Spot Index of 24 raw materials.
Talk of Relationship

Palmer, who ran full-page color ads in Hong Kong’s English- and Chinese-language papers for the share sale, stressed his connections when marketing the IPO of the company that he stood to draw A$1.1 billion ($1.2 billion) in payments from in the three years before it turned a profit.

“I’ve had a business relationship with China going back to the 1960s and I’m fed up with seeing them treated very poorly worldwide,” Palmer, a 57-year-old law school dropout who made his fortune in real estate, said to reporters last week in Hong Kong. The company may launch the share sale again when market conditions improve, Palmer said in a phone interview from Hong Kong yesterday.

Resourcehouse wants to develop an iron ore mine in Western Australia that will cost at least A$2.7 billion and an $8.6 billion coal mine in Queensland state. Mineralogy Pty and Waratah Coal Inc., both owned by Palmer, remain the owners of the mines and Resourcehouse only has an agreement to extract specific quantities.
Counter Statements

“If they are floating high quality assets then even in this sort of market there should be takers for the IPO,” Wendt said. “The whole thing seems to have been conducted with very poor planning and you just wonder whether Clive wielded too much power and he was the one making these ad-hoc decisions.”

Resourcehouse’s main assets are the rights to mine 1.4 billion metric tons of coal and 10 billion tons of iron ore. The two commodities are used to make steel. China’s demand for the metal may rise by as much as a quarter by 2015 from last year, according to the China Iron & Steel Association, which represents producers.

“Of course I wield the power at the company because I own the company,” Palmer said yesterday. “The assets are nobody’s but mine. The banks were the ones responsible for the advice to go to the market at that time. But I don’t hold them responsible for the IPO’s failure because nobody can predict what happens in the market from one day till the next.”

BOC International Holdings Ltd., HSBC Holdings Plc, Royal Bank of Scotland Group Plc and UBS AG managed the Resourcehouse offering.
Price Cut Considered

The company had originally sought to sell 5.7 million shares at between HK$4.48 to HK$4.93, before cutting the price to HK$3.45, according to a term sheet. That would have raised the company $2.5 billion. As late as the afternoon before the offer was pulled Palmer said he hadn’t made any decisions.

“We still have options and we need to consult our directors,” he said by phone from Hong Kong before pulling the deal. Palmer was ranked last month by BRW magazine as Australia’s fifth-richest man with a fortune of A$5.05 billion.

Following the IPO, Resourcehouse’s payments to Palmer’s closely held companies would have included A$930 million over the three years to 2014 as well as royalties on iron ore and coal output.

“It’s absolutely a turnoff for investors because how can you be sure how those fees are going to be spent? It is unusual,” Michael McCormick, fund manager at Belvedere Share Managers Pty in Sydney, said by phone.

China Railway Group Ltd. and Metallurgical Corp. of China Ltd. had both agreed to invest about $200 million in Resourcehouse. The company said the IPO may be followed by a A$1.9 billion debt sale to a Chinese company.

Resourcehouse said it wanted at least one Chinese company to provide or arrange debt to fund about 70 percent of the cost of building the initial stage of the China First iron ore project, the company said in the prospectus. Any financing deal would have needed the approval of Mineralogy.

http://www.bloomberg.com/news/2011-06-05/palmer-s-fourth-failed-ipo-bid-shows-hong-kong-not-swayed-by-resourcehouse.html

Prada Said to Raise HK$16.7 Billion in IPO
By Elisa Martinuzzi and Fox Hu - Jun 16, 2011 8:49 PM ET

Prada SpA raised HK$16.7 billion ($2.14 billion) in its initial public offering, following Samsonite International SA as the second foreign issuer in a week to scale back its Hong Kong fundraising plans.

The Milan-based luxury goods retailer priced 423.3 million shares at HK$39.50 each, below the middle of the marketed range, according to two people familiar with the matter. The sale values Prada at about 9 billion euro ($12.8 billion), or 23 times 2011 earnings, said one of the people, who asked not to be identified because the details aren’t public.

Prada had sought to sell the shares at HK$36.50 to HK$48, according to the IPO prospectus. The company yesterday narrowed the range to HK$39.50 to HK$42.25 after getting orders for just half of the stock offered to retail investors, two people with knowledge of the matter said.

Like Prada, Samsonite narrowed the price range marketed to investors, and priced its IPO at the bottom of the narrowed range. The Mansfield, Massachusetts-based luggage maker yesterday dropped 7.7 percent in its first day of trading from its initial public offering price of HK$14.50. The benchmark Hang Seng Index fell 1.8 percent.

http://www.bloomberg.com/news/2011-06-16/prada-said-to-price-shares-at-hk39-50-in-h-k-.html

Mall operator leads new drive to list on exchange
28 June 2011
The Standard

Several mainland companies are looking to list on the Hong Kong exchange, led by wholesale commercial mall operator ZALL Development, which plans to raise up to HK$1.95 billion.

The roadshow starts tomorrow, with bookbuilding set to begin the next day for the Wuhan-based firm, which owns 590,000 square meters of mall space housing leather products, clothing and home appliance stores.

Meanwhile, Russia's No2 oil company LUKOIL will likely shelve its plan to list in Hong Kong this year, a vice president said in Moscow yesterday.

Back in Hong Kong, Beijing Jingneng Clean Energy locked in HK$778.8 million from two institutional investors _ insurer China Life (2628) and financial service group Fidelity Investment _ to have its international tranche fully covered.

But the retail book won only HK$4 million in margin orders, not even 1 per cent of its HK$564 million target. Waste water treatment company CT Environmental Group may price its initial public offering at the lower end, or HK$1.68 apiece, while cotton yarn and fabric producer Golden Shield Holdings plans to raise up to HK$171 million by floating 244.9 million shares.

Golden Shield's offering launches today, with minimum spending at HK$2,828.22 per board lot of 4,000 shares priced at 70 HK cents apiece.

New World Development's (0017) mining spinoff Newton Resources priced its IPO at its lowest end of HK$1.75 per share to raise about HK$1.75 billion. Trading starts on Thursday.

Another flotation priced at the lowest end was China Fiber Optic at HK$1.20 per share. It raised about HK$487.2 million, with debut slated for July 14.

Lee & Man Handbags (1488), listing by introduction yesterday, traded at 77 HK cents on debut compared with its opening price of 70 HK cents apiece.

Market tipped to see HK$400b in new listings
Despite the best first-half performance in a decade, with IPOs raising HK$182.2 billion, the total proceeds for the year are expected to be 11pc lower
30 June 2011
South China Morning Post

Hong Kong is expected to attract HK$400 billion in initial public share offerings this year, a drop of 11 per cent from last year despite recording the best half-year performance in terms of listing proceeds in a decade.

A Deloitte's report shows there were 33 offerings in the first six months of this year, raising HK$182.2 billion.

About 100 companies are planning to list by the end of this year, against 95 last year, when total proceeds reached HKS$449 billion.

Listing proceeds will be lower this year because of the smaller deal sizes. Edward Au, a national co-leader of public offerings at Deloitte China, said the size of most of the deals would be between US$500 million and US$1 billion, while about eight deals would exceed US$1 billion.

Au also said international listings were growing in importance over mainland companies, with five of the six biggest share sales in the first half involving international firms.

He expects to see about 15 international listings by the end of the year. Such listings already make up 58 per cent of all the offerings in the first half, compared with 52 per cent in the same period last year.

"We expect more international companies to opt for a listing by introduction since the stock market is likely to continue to be choppy in the second half of the year," Au said.

Listing by way of introduction means companies are seeking a secondary listing without raising funds. The companies may apply to raise funds later.

Au said the first listing of a US firm was expected by the end of this year, with the rest of the international listings coming from various countries including France, Italy, Australia and Singapore.

Most of the new listings would be in the retail and consumer, financial services and energy and resources sectors.

The retail and consumer sector led the list in the first half, accounting for 34 per cent of the 33 offerings. However, the energy and resources sector raised the most funds, making up 51 per cent of the listing proceeds, boosted by deals such as Glencore International and China Hongqiao Group.

Louis Tse Ming-kwong, a director of VC Brokerage, said the appetite for the "China growth story" was waning in Hong Kong's listing market following a spate of "indiscriminate listings" from the mainland, especially in the retail, consumer and resources industries.

Tse said international listings, such as Samsonite International and Prada, had begun to outperform the overall stock market after initial jitters and investors were starting to shy away from mainland private companies because of concern about their asset quality.

He also said it would be difficult for mainland companies to attract investors unless they had niche market positions.

However, Raymond Ma, a director of research at Fidelity International, said the mainland consumer sector would continue to record strong growth in the next five to 10 years. He is bullish on department stores and consumer staples, including food processing and food retail businesses, despite the recent concerns about the corporate governance of those in the food and agribusiness sector.

But investors should seek to avoid mainland companies that were listed overseas for no apparent reasons.

"One can argue that a US listing had an edge in sectors like the internet, technology, pharmaceuticals and health care because the US has specialty investors that could give the stocks fair and good value," Ma said. "But other than that, why go to list in the US when you can list in Hong Kong or the mainland?

"There must be some reason behind it. Investors should be more cautious of internationally listed Chinese companies, instead of just blaming their corporate governance."

Sun Art Frenzy Shows Hong Kong IPO ‘Dichotomy’
Bloomberg
By Fox Hu and Jonathan Burgos - Jul 28, 2011 9:18 AM GMT+0800

The best debut of a Hong Kong initial public offering since 2009 may not be enough to spur a recovery in a market where investors have lost money on more than half the sales this year.

Sun Art Retail Group Ltd., China’s largest hypermarket operator, surged 41 percent yesterday in the biggest first-day gain for an IPO of at least $500 million since cement maker BBMG Corp. rose 56 percent in July 2009, data compiled by Bloomberg show. Only 20 of the 49 companies that have gone public in Hong Kong this year are trading above their offer price.

Sun Art “is a good reflection of the dichotomy we are seeing in the market right now: some deals have faltered, while others have done very well,” said Will Li, head of equity capital markets for China at Deutsche Bank AG in Hong Kong. The German bank wasn’t among Sun Art’s underwriters. “Investors do have cash on hand but are being more selective.”

At least six companies have canceled or delayed Hong Kong IPOs in the past three months, as demand wavers amid concern China’s efforts to contain inflation will curb growth. Shanghai- based Sun Art, which raised $1.2 billion, tapped investor optimism that consumer spending will withstand possible interest rate increases better than other areas of the economy as household incomes rise.

Sun Art, backed by France’s Groupe Auchan SA, plans to use proceeds from the IPO to expand in smaller Chinese cities where real estate prices are lower than in Shanghai and Beijing, it said this month. The company has 197 hypermarkets under the “Auchan” and the Ruentex Group’s “RT-Mart” brands in the world’s second-largest economy, and plans to open 48 stores in China this year, according to Executive Director Peter Huang.

Beating Wal-Mart

The company’s 12 percent market share among hypermarket operators in China tops that of Wal-Mart Stores Inc. (WMT), which has 11.2 percent, according to Euromonitor.

Sun Art’s IPO valued the company at 31.4 times 2010 profit, while Hong Kong-listed Wumart Stores Inc., a Chinese supermarket operator, has a multiple of 37.3 times, according to data compiled by Bloomberg. Wal-Mart trades in New York at 12.8 times 2010 earnings, Bloomberg data show.

The CSI 300 Consumer Staples Index of 23 companies is the best performer among 10 industry groups on China’s CSI 300 Index (SHSZ300) this year with a 6.7 percent gain. The CSI 300 as a whole has slipped 4.1 percent since Dec. 31 as of yesterday’s close.

“Investors are confident about the outlook for consumer- related stocks as the sector will be less affected by policy tightening in China,” said Michiya Tomita, who helps oversee about $65 billion for Mitsubishi UFJ Asset Management Co. in Hong Kong. The broader appetite hasn’t returned given “ongoing concerns about the U.S. economy and the European debt crisis.”

Top of Range

Citigroup Inc., HSBC Holdings Plc and UBS AG managed Sun Art’s offering as global coordinators, while BNP Paribas SA, China International Capital Corp., Goldman Sachs Group Inc. and Morgan Stanley were joint bookrunners.

IPOs in Hong Kong have raised $15.3 billion this year, about a quarter of 2010’s record $58 billion tally, Bloomberg data show. Last year’s tally was bolstered by the sales of AIA Group Ltd. (1299) and Agricultural Bank of China Ltd., two of the three biggest IPOs in Hong Kong’s history. In the U.S., companies and their owners have raised $26.7 billion so far in 2011, compared with $37.8 billion for all of last year.

Sun Art was one of just two companies this year to price a sale of at least $1 billion at the top end of a range marketed to investors. The other was MGM China Holdings Ltd., a casino operator in Macau, where revenue is surging as visitors from China flock to gambling tables.

IPOs Pulled

At the same time, China Everbright Bank Co. has struggled to attract buyers for a share sale that may raise about $6 billion, amid concerns that loans to Chinese local governments may turn sour.

Everbright Bank, which in June delayed the offering, is seeking more so-called cornerstone investors before proceeding with the deal, people with knowledge of the matter said last week. Cornerstone investors are guaranteed shares in an IPO in return for a pledge not to sell the stock for a fixed time period.

Resourcehouse Ltd. and Hosa International Ltd. were among companies that scrapped Hong Kong IPOs in May and June as investors shied away from new equity. New China Life Insurance Co. and China Guangfa Bank Co. are among companies planning multibillion-dollar IPOs in Hong Kong as early as this year, according to people with knowledge of the transactions.

“I don’t think market sentiment for IPOs in Hong Kong has improved,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees $600 million. “Other companies may find it difficult to raise funds given the tight liquidity in the market.”

Mongolia Said to Plan Three City IPO for Tavan Tolgoi Coal Mine in 2012
Bloomberg (http://www.bloomberg.com/news/2011-08-30/mongolia-said-to-plan-three-city-ipo-for-coal-miner-in-2012.html)
Aug 31, 2011

Mongolia plans to raise as much as $3 billion by selling a stake in its Erdenes Tavan Tolgoi coal- mining company next year in the country’s biggest initial public offering, two people with knowledge of the matter said.

The landlocked nation between China and Russia aims to sell shares in Erdenes TT simultaneously in London, Hong Kong and Ulaanbaatar in the first half of next year, said the people, who declined to be identified as the information is private. The IPO may raise $2 billion to $3 billion, they said.

Erdenes TT would be the first company to go public in the three cities at the same time, as Mongolia capitalizes on a mining boom driven by demand from China and India. The IPO would be as much as four times the size of Mongolian Mining Corp.’s HK$5.8 billion ($744 million) initial share sale in Hong Kong last October.

By selling shares locally as well as in Hong Kong and London, Mongolia aims to let domestic investors participate in the IPO, the people said.

Mongolia’s MSE Top 20 Index jumped 17-fold in the past five years, making it the best performer among 92 benchmark stock measures globally tracked by Bloomberg. The local currency, the tugrik, has strengthened 4.8 percent against the dollar in the last 12 months.

The total market capitalization of the Mongolian stock exchange was about 2 trillion tugriks ($1.6 billion) as of July 25, according to data on the bourse’s website. Hong Kong’s exchange, Asia’s third largest, was valued at $2.56 trillion that day.
Production Doubles

Deutsche Bank AG (DBK) and Goldman Sachs Group Inc. (GS) will manage the IPO for Erdenes TT, while BNP Paribas (BNP) SA, Macquarie Group Ltd. (MQG) will also help arrange it, the people said. Dulam Sugar, chairman of Mongolia’s State Property Committee, which oversees the development of Tavan Tolgoi’s coal deposits, didn’t immediately respond to a phone call and an e-mail seeking comment yesterday.

Mongolia’s coal production doubled last year to 25 million metric tons to become the nation’s top export earner, spurring the government to push through development of mines. Tavan Tolgoi spans some 68,000 hectares (168,000 acres), with coking coal used in steelmaking located mainly in the central Tsankhi area, according to Erdenes MGL, the state-controlled owner of the deposit.

Mongolia needs to look beyond the coal and copper mines that are driving its economic boom to find a more balanced model of growth, Prime Minister Sukhbaatar Batbold said in an interview on March 8.

In July, the Mongolian government picked China Shenhua Energy Co., Peabody Energy Corp. and a Russian-Mongolian group to develop the Tavan Tolgoi deposit. A Shenhua-led group will get a 40 percent share in the project, while Peabody will hold 24 percent and the Russian-Mongolian venture 36 percent, according to a July 4 statement.

Biggest broker set to list on local exchange
The Standard
Wednesday, August 31, 2011

CITIC Securities has obtained approval from Beijing to list in Hong Kong.

China's largest broker - earlier seen raising up to HK$15.6 billion - can sell up to 1.14 billion shares.

Meanwhile, coaxial cable maker Jiangsu-based Trigiant Group has started its roadshow.

Also, women's shoe maker Hongguo started pre-marketing yesterday on its HK$2.34 billion IPO.

The Nanjing firm, a key Nine West and Guess supplier, begins its roadshow on September 9 and lists on September 23.

Road wide open for potential Ferrari IPO
The Standard
Friday, September 02, 2011

Italian carmaker Fiat is being encouraged by global investment banks to list Ferrari - its high-end sports car unit - on the Hong Kong bourse.

The potential initial public offering could help relieve Fiat's five billion euro (HK$55.61 billion) debt and boost valuation of the Italian giant.

Analysts estimate Fiat's value could appreciate by as much as US$6.3 billion (HK$49.14 billon) if Ferrari is floated.

Italian fashion house Prada (1913) raised HK$21.3 billion from its IPO in June - marking the second- largest fundraising on the Hong Kong exchange this year.

In other action, Rainbow Group - the largest distributor of high-end brand products in Macau - will have its listing hearing in the middle of the month. Rainbow, which now holds exclusive dealerships for more than 10 brands in Macau - including Emporio Armani, Cartier, Ermenegildo Zegna and Burberry - plans to raise up to HK$1.56 billion in Hong Kong.

The firm also operates 60 outlets in the mainland.

Separately, men's footwear maker Active Group will kick off the premarketing of its HK$545 million IPO next week. An indicative price range is said to be from HK$1.30 to HK$1.82 per share.

The company has not decided on the timing for opening its retail book until it sees how the listing of Hongguo proceeds.

Hongguo - which is involved in the women's footwear business in the mainland - aims to open its retail book on September 13.

Chow Tai Fook bid to add luster with US$4b IPO
The Standard
Thursday, September 01, 2011

Chow Tai Fook, the jewelry retailer owned by New World Development (0017) tycoon Cheng Yu-tung, has applied to launch a US$4 billion (HK$31.2 billion) local initial public offering by year-end.

The jewelry chain, which has over 1,300 outlets across Asia, will likely seek a dual- currency listing - in both Hong Kong dollars and yuan.

Meanwhile, mainland restaurant operator Xiao Nan Guo kicks off premarketing today for an IPO to raise up to US$200 million.

The Shanghai-based firm is due to start its roadshow on September 12.

Separately, the largest gas supplier to the capital - Beijing Jingneng Clean Energy - will likely revive its HK$4.9 billion IPO later this month at the earliest.

Also, Macau casino and and resort operator Melco Crown Entertainment will go ahead with its float next month to raise up to HK$3.9 billion.

The Nasdaq-listed company owns the City of Dreams hotel complex and casino.

Bourse newcomer China Kingstone Mining (1380), meanwhile, swung to a first-half profit of 9.77 million yuan (HK$11.9 million) from a 4.92 million yuan loss in the same period last year.

The marble producer, which listed in March, soared 6 percent to HK$1.43 yesterday after the results, but still trails its offer price of HK$2.25.

Russian mining firms eye float in SAR
The Standard
Wednesday, November 16, 2011

Three or four Russian mining companies are expected to float shares in Hong Kong in the second and third quarters of 2012, each seeking HK$7.8 billion in funds.

VTB Capital, the investment arm of Russia's top bank, revealed this when opening an office in the SAR.

"As part of our international strategy, we hope to be a bank of choice for Asian and emerging market clients, instead of being purely a Russian bank," said chairman Yuri Soloviev.

The Russian investment bank first came to local prominence last year when it was appointed joint bookrunner in the initial public offering of UC Rusal (0486).

The HK$17.47 billion deal made the aluminum giant the first Russian company to list on the Hong Kong main board.

Hong Kong is not the first stop in the region for VTB Capital, but its Singapore office may pale in significance to the Chinese market, given that the mainland is the biggest importer of commodities and Russia one of the biggest suppliers.

A sign of this emerges in VTB's plan to expand its payroll to between 30 and 35 from the seven that it is starting with. It is also in the process of recruiting a regional head. The office's main brief is the brokerage and advisory business.

The whole VTB Group, meanwhile, is aiming to boost its yuan-related business. In January this year, VTB Bank issued one billion yuan (HK$1.23 billion) worth of dim sum bonds with a three-year maturity. The retail bank also started accepting yuan deposits from last month.

Business is booming, with yuan deposits amounting to tens of millions of US dollars since.

The central parity of the yuan against the US dollar stood at 6.3436 yesterday, down 135 basis points over Monday.

City ideal for mining, resources listings
Updated: 2011-12-01 07:52
China Daily

Hong Kong continues to be a favorite destination for fundraising by global mining and natural resources companies, with as many as 15 IPOs in the pipeline next year, according to a report by PricewaterhouseCoopers (PwC).

The accounting firm predicted as many as 15 overseas and mainland mining and natural resource companies to list in Hong Kong in 2012. It added that this trend will gather momentum when global economic uncertainty subsides and market confidence returns.

"Global mining and resources companies are eager to seek a dual or secondary listing on the local bourse as they want to enhance their brands in the mainland market," said Benson Wong, mining leader and assurance partner of PwC Hong Kong.

Wong said that approximately one-third of the 15 mining and natural resources company IPO candidates in 2012 will come from overseas while the remaining two-thirds will be mainland-based. These overseas resources companies come from Canada, Russia, Mongolia, South Africa and Indonesia.

The Hong Kong stock market has witnessed a flurry of IPO activities by global resources companies since 2010. Russian aluminum firm Rusal had the third largest IPO in the city in 2010. Other resource companies such as Canada's SouthGobi, Brazil's Vale SA and Switzerland-based Glencore all made their debuts in the local share market.

According to PwC, the number of mining and resources-related IPOs have decreased in 2011 compared with 2010, from 22 to eight through the first three quarters. But the funds raised so far in 2011 have increased from HK$68 billion in 2010 to HK$94 billion.

Wong is bullish on the attractiveness of HKEx because of robust demand for commodities on the mainland.

"As the mainland's economy is tipped to grow annually by 7 to 8 percent in 2012, this staggering economic growth rate will represent a continuous demand for commodities, thus luring more global resources companies to establish their first footholds in the mainland market. The local capital market is poised to be the ideal location for public listings because of its proximity to the mainland market," Wong said.

As of September 2011, the total capitalization of local-listed resources companies amounted to HK$2,800 billion, representing 17.3 percent of the total capitalization of the local share market, according to HKEx data.

Smaller firms steal IPO sparkle
The Standard
Tuesday, December 06, 2011

Heavyweight Chow Tai Fook was overshadowed yesterday by smaller listing candidates that attracted more margin orders.

The jeweler, which is seeking up to HK$22 billion from an initial public offering, drew HK$339 million in margin orders as of yesterday, brokers said. This equals 31 percent of a tranche worth HK$1.1 billion allocated to retail investors.

In contrast, health and wellness equipment maker OTO Holdings froze up HK$1.46 billion from retail investors. The company aims to raise HK$128 million. It ended bookbuilding yesterday.

Modest demand for Chow Tai Fook reflected retail investor preference for smaller IPOs. Commodity giant Glencore (0805) and CITIC Securities (6030), China's biggest brokerage, which listed earlier this year, failed to fill their retail books.

But Milan Station (1150), which raised HK$310 million, was 2,180 times oversubscribed.

In other action, Haitong Securities pulled in orders worth HK$652 million. The broker's international and public tranches were fully subscribed.

Separately, swimsuit maker Hosa International, which cut its deal size to HK$640 million, opens its retail book today. The company suspended its fundraising plan in late June. Subscription to one board lot of 2,000 shares costs HK$3,232.26.

The company is promising a 30 percent dividend payout ratio after its trading debut, slated for December 12. Hosa forecast net profit of at least 270 million yuan (HK$330 million) this year. Meanwhile, Guodian Technology & Environment Group will meet institutional investors today to promote its HK$5.03 billion public float.

The company is mainly involved in providing environmental protection solutions to coal-fired power plants in China. It set an indicative price range of HK$2.16 to HK$2.42 per share.

Also, investors are keeping an eye on today's trading debut of handbag maker Sitoy Group Holdings. In the gray market last night, Sitoy shares opened 4.7 percent higher above the offer price of HK$2.95 per share. They closed at HK$3.07, generating a paper gain of HK$120 for one board lot of 1,000 shares.

Chinese Firms Tired of Wall Street Shift to H.K.
By Mark Lee - Dec 7, 2011 7:25 PM ET

Chinese technology companies that raised $7.8 billion from Wall Street investors in initial public offerings during the past 12 years have at least one good reason to delist in New York and take their business to Hong Kong.

Valuations appear to be significantly higher in Hong Kong. Perfect World Co. (PWRD), China’s fourth-biggest online games operator, trades at 3.9 times its estimated earnings in New York, while smaller rival NetDragon Websoft Inc. (777) is valued at 13 times in Hong Kong. Such disparities may push some technology companies to consider moving back east, said Victoria Mio, a senior portfolio manager at Robeco Group in Hong Kong.

More strict oversight by New York regulators and allegations of fraud from short-seller Muddy Waters LLC have suppressed the USX China Index of 174 Chinese stocks trading on Wall Street by 21 percent this year. The gauge trades at 12 times earnings, compared with 20 times for Hong Kong’s Hang Seng Composite Information Technology Index. (HSCIIT)

“I am tired of the U.S.,” Yang Tianfu, chief executive officer of Harbin Electric Inc. (HRBN), said in a phone interview. “We just couldn’t communicate with the investors.”

‘Overtake’ Wall Street

The Harbin, China-based maker of electric motors delisted from the U.S. last month and can “easily” complete a listing in Hong Kong or Shanghai, Yang said.

Companies wanting to leave Wall Street may choose Hong Kong because listing in Shanghai or Shenzhen would require them to restructure into domestic Chinese firms, said Richard Lim, a Palo Alto, California-based partner at GSR Ventures, which invests in technology companies in China.

China Renaissance Partners, a Beijing-based investment bank that advised New York-listed E-Commerce China Dangdang Inc. (DANG) and NetQin Mobile Inc., is working on potential deals that may result in listings in Hong Kong, Chief Executive Officer Bao Fan said. Some involve U.S.-listed companies that may be taken private, he said without naming them.

“Hong Kong, over time, will overtake the U.S. as the preferred place of listing for Chinese technology companies,” Bao said. “In the long term, the core group of holders in these Chinese technology firms will have to be Chinese,” rather than overseas, investors, he said.

18 Delistings

In October, Shanghai-based Internet companies Shanda Interactive Entertainment Ltd. (SNDA) and China Real Estate Information Corp. (CRIC) unveiled plans to delist from the U.S. after their shares underperformed Hong Kong-traded rivals. They join 16 other U.S.- listed Chinese companies that announced delisting plans since 2010, according to data from Roth Capital Partners LLC, a Newport Beach, California-based financial firm.

“Some Chinese companies listed in the U.S. that trade at low valuations may consider delisting and go public in Hong Kong,” said Mio, whose fund managed $188 billion of assets, including the Hong Kong-traded stock of Tencent Holdings Ltd. (700), China’s biggest Internet company by revenue, as of September.

Funtalk China Holdings Ltd. (FTLK), a Beijing-based mobile-phone retailer that delisted from New York in August, “won’t rule out” listing in Hong Kong, said Francis Wan, a senior vice president.

48 IPOs

NetDragon, based in Fuzhou, southeast China, is also more expensive than New York-listed Chinese online game firms Shanda Games Ltd. (GAME), Changyou.com Ltd. and Giant Interactive Group Inc. (GA), according to Bloomberg data.

Teal Willingham, who represents Beijing-based Perfect World at Christensen International, said the company doesn’t comment on its share price.

At least 48 Chinese technology stocks, including Baidu Inc. and Youku.com Inc. (YOKU), completed IPOs in the U.S. since 2000. By comparison, 17 did in Hong Kong.

Hong Kong Exchanges & Clearing Ltd. (388), operator of Asia’s third-biggest stock market, offers “a perfectly good listing platform” for Chinese technology companies, said Mark Dickens, the exchange’s head of listings. There are plans by investment banks to take some Chinese companies currently traded in New York for listings in Hong Kong, he said.

“We heard investment bankers had been exploring the opportunities,” Dickens said in an interview.

Muddy Waters

About 100 companies are seeking the exchange’s approval to list their shares or are planning share sales after having received approval, Dickens said at a Nov. 30 forum in Hong Kong.

Focus Media Holding Ltd. (FMCN), a Shanghai-based outdoor advertising company, plunged 40 percent in New York trading on Nov. 21 after a report by Muddy Waters alleged the Chinese firm had overstated its assets.

Spreadtrum Communications Inc. (SPRD), a Chinese chip designer, declined as much as 34 percent in intraday trading on June 28 after the short seller alleged the company had misstated financial results.

The Securities and Exchange Commission sent letters seeking explanation of corporate structures at U.S.-listed Chinese companies, including Shanda Interactive and Kongzhong Corp., said Paul Boltz, a Hong Kong-based partner at Ropes & Gray.

The SEC in June cautioned investors about buying shares in companies formed by reverse mergers, a maneuver used by more than 400 Chinese businesses to gain stock-market listings in North America while avoiding the scrutiny of a public offering.

JP Morgan

The buyouts of Chinese companies from stock-market investors in New York, and relisting them in markets offering higher valuations, may generate profit for private-equity investors.

“There is a real interest among private-equity funds in these companies,” said Mark Tobin, co-director of research at Roth Capital. Some U.S.-listed Chinese companies are trading at valuations “far below” those of private companies in China, he said.

Shanda Interactive Chairman Chen Tianqiao’s group, which plans to buy out the company, discussed financing with JPMorgan Chase & Co. (JPM), the company said Oct. 17. PAG Asia Capital, a Hong Kong-based alternative investment manager, helped fund the management-led buyout of Funtalk.

Most of the Chinese companies trying to list in the U.S. are relatively small and are subject to an increasingly difficult regulatory environment, Bao said. Hong Kong also has the benefit of having a sophisticated, international capital market, he said.

“Most of the U.S. investors don’t understand China very well,” Bao said.

http://www.bloomberg.com/news/2011-12-08/chinese-companies-tired-of-wall-street-shift-to-hong-kong-listings-tech.html

I smell SOX being that rotten egg.

Chow Tai Fook Said to Raise $2 Billion in IPO
Dec 9, 2011 12:32 PM GMT+0800
Bloomberg (http://www.bloomberg.com/news/2011-12-09/chow-tai-fook-said-to-raise-2-billion-in-ipo.html)

Chow Tai Fook Jewellery Group Ltd., the company with revenue greater than Tiffany & Co. (TIF), raised HK$15.8 billion ($2 billion) after selling shares at the bottom of a price range marketed to investors, said two people with knowledge of the matter.

The company sold 1.05 billion shares at HK$15 apiece, said the people, asking not to be identified because the information is private. Chow Tai Fook had offered the shares at HK$15 to HK$21 each, according to its IPO prospectus. Had the jeweler sold the shares above $18.52 apiece, the IPO would have been Hong Kong’s biggest this year.

Chow Tai Fook joins a growing list of companies that have priced their stock offerings at or near the minimum amount sought as stocks have tumbled in Hong Kong amid concerns about Europe’s debt crisis. New China Life Insurance Co. priced its $1.9 billion Hong Kong and Shanghai IPO near the bottom of its marketed range yesterday, and HKT Trust’s $1.2 billion November IPO was priced at the low end.

“The poor reception to IPOs reflects weak global investor sentiment,” said Cedric Ma, Hong Kong-based senior strategist at Convoy Asset Management Ltd., which oversees the equivalent of $260 million. “The market is also looking a little bit crowded since a lot of companies are trying to raise cash at the same time.”

Busiest Month

Chow Tai Fook and New China Life are among companies raising more than $5 billion from initial public offerings in Hong Kong this month. The offerings may make December the busiest month for new share sales in the city this year, data compiled by Bloomberg show.

The jewelry chain, controlled by billionaire Cheng Yu Tung, joins Italian fashion house Prada SpA in raising funds in Hong Kong, where luxury-goods companies tap China’s growing affluence. Prada raised $2.5 billion in June, and its shares have dropped 10 percent from the offer price.

Priced at the bottom of its range, Chow Tai Fook is valued at about 15 times estimated net income for the year ending March 2013, one of the people said. Tiffany, the New York-based luxury jewelry retailer, trades just below 16 times the average analyst estimate for earnings for the year ending January 2013, data compiled by Bloomberg show.

Chow Tai Fook posted sales of HK$35 billion for the 12 months to March 31, 46 percent more than Tiffany’s full-year revenue.

Big Blessing

Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co. managed the IPO for Chow Tai Fook. Joseph Lo, an external spokesman for Chow Tai Fook at Brunswick Group, declined to comment.

Founded in 1929 in the southern Chinese city of Guangzhou, the company was named after founder Chow Chi Yuen. “Tai Fook” means “big blessing” in Chinese. The company, with more than 1,400 outlets in greater China, plans to start trading on Dec. 15, the prospectus shows.

The shares priced with Hong Kong’s Hang Seng Index down 2.6 percent as of the midday close today. The benchmark is down 19 percent this year. Baoxin Auto Group Ltd, a dealer of BMW and Land Rover cars in China, also priced its $415 million Hong Kong IPO at the bottom of the range marketed to investors, and Citic Securities Co., raised $1.8 billion in September after selling shares in the low end of its pricing range.

Chow Tai Fook has 12.6 percent of China’s jewelry market, with a 20 percent share in Hong Kong and Macau, the company said in the IPO filing, citing a Frost and Sullivan report. It sources rough diamonds from companies such as Rio Tinto and Diamond Trading Co., the distribution arm of De Beers.

Retail sales in China have grown an average of 17 percent in the first ten months of this year, according to data compiled by Bloomberg. In Hong Kong, Chinese visitors splurging on high-end shoes, watches and jewelry have driven monthly retail sales to record highs.

Beijing clean power supplier aims to heat up $1.99b IPO
The Standard
Monday, December 12, 2011

Beijing Jingneng Clean Energy Corp has revived its delayed initial public offering. It now aims to raise HK$1.99 billion. Earlier, the capital's largest gas-fired power provider set a target of HK$4.90 billion before calling off the float in July.

The firm restarts bookbuilding today through selling 1.14 billion shares. It may begin trading before Christmas.

This time around, the offer has drawn four cornerstone investors including leading private equity firm SAIF Partners and wind turbine maker Xinjiang Goldwind Science Corporation (2208).

Minimum order is HK$3,500 for one board lot of 2,000 shares under an indicative price range of HK$1.59 to HK$1.75 per share.

In other action, polyester yarn maker China Weaving Materials Holdings and slimming center operator provider Perfect Shape also open retail books today and tomorrow respectively.

In effect four companies are vying for investor attention at a time when sentiment remain weak. In the fourth quarter this year, nearly all listing candidates priced their shares at the bottom end of their indicative range.

Jeweler Chow Tai Fook was no exception. The local jewelry giant also priced at the lower end, or HK$15 per share, as market volatility soured investor appetite for new listings.

There were no cornerstone investors and the retail tranche was not fully covered. The company will raise HK$15.75 billion, becoming the third largest IPO after Glencore (0805) and Prada (1913).

Separately, Haitong Securities, which was set to price its offer on Friday, delayed pricing as the benchmark Hang Seng Index fell 2.7 percent to 18,586 points.

Final pricing will be announced today.

But demand was high for OTO Holdings. Its retail book was 250 times oversubscribed. Trading in its shares will begin tomorrow.

"Angry Birds" maker eyes Hong Kong IPO

By Tarmo Virki

HELSINKI | Fri Dec 16, 2011 3:05pm EST

(Reuters) - The company which created "Angry Birds," the world's most popular computer game, is considering a stock market flotation in Hong Kong, joining the many foreign firms who have gone public there.

"In Asia there are growing markets -- the people and the money," Peter Vesterbacka, marketing chief of Finnish company Rovio, told Reuters.

Finnish weekly Tekniikka&Talous reported on Friday the firm was looking at 2013 for the IPO but Vesterbacka said no decision had been made.

Other large global firms to have gone public on the Hong Kong exchange include fashion house Prada, luggage maker Samsonite and cosmetics maker L'Occitane.

Companies benefit from access to high liquidity from Chinese pension funds and retail investors and the bourse offers higher valuations in some sectors.

Rovio might also go to New York for the IPO.

In May Rovio Chief Executive Mikael Hed told Reuters the firm was aiming for a stock market listing in 2-3 years time in New York, which is seen as the key market for technology start-ups due to its dedicated investors.

"Angry Birds," in which players use a slingshot to attack pigs who steal the birds' eggs, has stayed top game since it was launched for Apple's iPhone in 2009.

VALUE TARGET

Vesterbacka told Tekniikka&Talous the aim is to build the company into a media giant with a market capitalization similar to Walt Disney Co, which is valued at $65.3 billion.

"That is the target. There is no reason why we should not be able to build a company of that size," Vesterbacka was quoted as saying, adding Rovio's 2011 revenues would be around $100 million, compared with $10 million a year before.

The weekly said estimates of Rovio's value range from 2 billion euros ($2.6 billion) to 7 billion euros ($9.1 billion).

It has reached a record 600 million downloads in two years, compared with rival Electronic Arts' hit game Tetris which reached 100 million mobile downloads last year.

Rovio has unveiled two more "Angry Birds" games and Vesterbacka told the paper the firm would launch 5-6 more games with the same characters in 2012.

Rovio is also expanding its brand to toys and playgrounds, and is taking the birds to the big screen.

Vesterbacka told the weekly the first full-motion animated movie featuring the characters was still 2-3 years away.

Earlier this year, Rovio raised $42 million from venture capital firms including Accel Partners, which previously backed Facebook and Baidu, and Skype founder Niklas Zennstroem's venture capital firm Atomico Ventures.

Rovio was founded in 2003 after three students including Niklas Hed -- CEO Mikael Hed's cousin and now Rovio's COO -- won a game-development competition sponsored by Finnish mobile phone maker Nokia Oyj and Hewlett-Packard CO.

http://www.reuters.com/article/2011/12/16/us-angrybirds-idUSTRE7BF0X220111216

Five in rush to list before trading ends for the year
The Standard
Wednesday, December 21, 2011

Five candidates, all mainland firms, are rushing to float their shares in the six remaining trading days of the year.

Guodian Technology and Environment, which earlier delayed its listing plan, asked former subscribers to confirm interest by tomorrow during bookbuilding.

The provider of environmental protection products and services has cut its float size by half to 1.1 billion shares and now aims to raise HK$2.38 billion for a December 30 debut.

Meanwhile, China Tianrui Group Cement and SPT Energy are set to price their new shares at HK$2.41 and HK$2.16, or the bottom end of their price range. Both plan to go public on Friday.

China Weaving Materials and Beijing Jingneng Clean Energy will float their shares tomorrow.

Separately, Singapore-listed scientific instrument maker and distributor Techcomp (Holdings) (1298) will list in Hong Kong by way of introduction today.

On Monday, the stock traded in Singapore around HK$2.38.

In other action, premium restaurant operator Noble House (China) Holdings is gearing up to float on the Growth Enterprise Market board on December 30.

The Shanghai-based chain plans to place a total of 98 million shares, each priced between HK$0.55 and HK$0.85.

More than 40 percent of the proceeds will be used to start a new restaurant in Ningbo, Zhejiang Province - the eighth in the company network.

HKEx feels bite as Big Apple closes gulf in IPO chase
The Standard
Thursday, December 22, 2011

The New York Stock Exchange has caught up with Hong Kong this year as the top destination for initial public offerings, according to Ernst & Young.

Total IPO proceeds this year from the local exchange is expected to be HK$260 billion - down a sharp 42 percent from 2010 and just over the HK$259.85 billion expected to be raised on the NYSE, the global accounting firm said.

Last year, IPO proceeds from the local bourse reached HK$449 billion while that on the NYSE hit the equivalent of HK$291.75 billion.

The SAR is expected to continue its reign next year although total proceeds are expected to slip further to only HK$250 billion.

"Many companies are in the listing pipeline of 2012. They will take action as long as the global capital market stabilizes," Ernst & Young assurance partner Jacky Lai Wan-fung said.

On a monthly basis, December is seeing the largest wave of IPOs in Hong Kong, Lai noted.

Big names to have already listed this month include Chow Tai Fook Jewellery Group (1929) and CITIC Securities (6030), which together soaked up HK$26 billion from the market.

Meanwhile two companies started their IPO exercise yesterday, with one of them, mainland yarn maker China Weaving Materials (3778), pricing its shares at HK$0.70.

In the gray market, China Weaving opened 5.7 percent higher at HK$0.74. But it finally closed at HK$0.72, representing a paper gain of HK$80 for one board lot of 4,000 shares.

As for Beijing Jingneng Clean Energy (0579), more than 95 percent of its 1.14 billion shares were allotted to institutional investors, with each share priced at HK$1.67.

However, no transaction was recorded in the gray market last night.

Separately, Techcomp (Holdings) (1298), which listed in Hong Kong by way of introduction, started trading yesterday.

It closed at HK$2.43 compared with S$0.40 (HK$2.40) on the Singapore bourse on Tuesday.

Swire sets date for properties spin-off
The Standard
Thursday, December 22, 2011

Swire Pacific (0019) said yesterday that it will spin off its property unit by way of introduction.

Under the scheme, the conglomerate will distribute seven shares of Swire Properties (1972) for every 10 Swire Pacific "A" shares and for every 50 "B" shares (0087). The issue will amount to 18 percent of Swire Properties shares.

Shareholders will be entitled to a special interim dividend after the market close on January 5. Swire Properties plans to start trading on January 18. Shares will be traded in board lots of 200.

The long-awaited spin-off is meant to boost the profile of its mainland property and marine services business. Worsening market conditions forced Swire to scrap a HK$20.8 billion float of the property unit in May last year.

In July, the company sold Festival Walk shopping mall in Kowloon Tong for HK$18.8 billion, the most expensive single retail real-estate transaction ever in Hong Kong, in a move that "largely relieved the firm of funding pressure," a source said.

Swire has committed HK$9.12 billion of expenditure to mainland property development, and HK$14.6 billion for Swire Properties Offshore Group, according to the company's interim results statement.

Swire A shares fell 1.5 percent to HK$92.50 yesterday, compared with a 1.9 percent rise in the benchmark Hang Seng Index.

This is a bit worrying given a lot of scandals on overseas exchanges of late. Market participants need to make sure they are listing quality firms on the market and should bear more legal responsibility for their work.

China May Relax Rules on H.K. IPOs: Yao
Jan 16, 2012 1:36 PM GMT+0800
Bloomberg

China will consider relaxing overseas listing rules to encourage smaller Chinese companies to sell shares in Hong Kong, a top official at the nation’s securities regulator said.

Standards to list so-called H shares are too high and the approval process is time-consuming, Yao Gang, vice chairman of The China Securities Regulatory Commission, said at a conference in Hong Kong today. A relaxation will help private companies and small-to-medium enterprises in China to sell stock, he said.

“Current H-share listing rules were set more than a decade ago, and there haven’t been changes throughout these years,” Yao said. “This year, the CSRC will conduct a comprehensive revision on overseas listing rules,” Yao said.

Premier Wen Jiabao said on Dec. 20 that many enterprises are suffering from higher credit costs, after gross domestic product grew at the slowest pace since 2009 in the third quarter. Six-month interbank borrowing rates in Shanghai have risen to 5.42 percent, up from 3.66 percent on Jan. 17 last year, according to data compiled by Bloomberg.

First-time share sales by Chinese companies overseas raised $15.3 billion last year, down 58 percent from 2010 and hitting a three-year low, Bloomberg data show. There were 59 such deals last year, compared with 124 in 2010, the data show.

In Hong Kong, first-time offerings by Chinese companies raised $13.1 billion last year, a 59 percent decline from 2010, according to Bloomberg data.

Canada’s Sunshine Oilsands heads for Hong Kong IPO
RoBert Cookson in Hong Kong and Leslie Hook in Beijing
Financial Times
Published Monday, Jan. 30, 2012 10:12AM EST
Last updated Monday, Jan. 30, 2012 10:23AM EST

Sunshine Oilsands, a Canadian company backed by Chinese state-owned enterprises, has shunned Toronto and will next month launch an initial public offering in Hong Kong that could raise as much as $600m.

The company plans to sell a 25-per-cent stake in the offering, according to people close to the deal, with the shares due to start trading by the end of February. It would be the biggest IPO so far this year anywhere in the world, according to Dealogic.

Sunshine’s decision to float its shares on the Chinese exchange is significant because its peers have traditionally listed in Toronto, where investors have years of experience valuing unconventional oil deposits.

Sunshine’s choice of Hong Kong was influenced by some of its key shareholders, which are controlled by the Chinese government. Last March Sunshine raised $230-million from investors including China Life Insurance and Bank of China Group Investment.

China is the world’s second-largest crude importer, after the U.S., and its voracious appetite for oil has prompted Chinese companies to invest aggressively in non-traditional oil sources including oil sands, shale oil and gas, and deepwater oil reserves.

While oil sands projects, most of which are based in Alberta, have come under criticism in Canada and the US because of their environmental impact and carbon emissions, Chinese companies have had few qualms about investing in them. Last year CNOOC Ltd. , China’s largest offshore oil producer, acquired Opti Canada, a bankrupt oil sands producer, for $2.1-billion including debt.

Sunshine and its IPO bookrunners - Bank of China International, Deutsche Bank and Morgan Stanley - started sounding out potential investors on Monday and will begin taking formal orders for the shares next week.

The company plans to set a final price for the shares on Feb. 14, ahead of its stock market debut on Feb. 21.

The share sale will provide a key test of investor demand in the Hong Kong market, which has hitherto seen few listings by early-stage resource companies.

As Sunshine’s projects are at an early stage of development, the company will not generate a profit until 2014 at the earliest, according to a report by Bank of China International. The report values the company from about $1.8-billion to $2.3-billion, but warns that it faces “high execution risk” and would suffer from a decline in the price of oil.

Sunshine was founded in 2007 by Michael Hibberd, a former financier at ScotiaMcLeod, and Songning Shen, a professional geologist who has worked at several oil groups including Bohai Company, a subsidiary of CNOOC. Mr Hibberd and Mr. Shen are now co-chairmen of the group.

Oil sands are composed of bitumen mixed with sand, clay and water. In an expensive procedure, the bitumen needs to be extracted from the sand using hot water or steam and then processed before it can be fed into a typical refinery.

Other major oil sands investments from Chinese companies include Sinopec’s $4.7-billion investment in Syncrude in 2010 and PetroChina’s $1.7-billion investment in Athabasca Oil Sands, a private company, in 2009.
...


http://www.theglobeandmail.com/report-on-business/international-news/canadas-sunshine-oilsands-heads-for-hong-kong-ipo/article2319356/

Sinopec seeks to list services unit
The Standard
Tuesday, January 31, 2012

The parent firm of Sinopec Corporation (0368) - Sinopec Group - plans to spin off its oilfield engineering services business on the main board this year.

The unit is expected to raise as much as HK$10 billion and the initial public offering process is set to begin in March.

China International Capital Corporation is the main sponsor of the IPO.

Applications will be handled in the middle of the year and bookbuilding is slated for October.

The state-owned oil giant hopes to consolidate its onshore and offshore subsidiaries - which are offering engineering services - into an integrated firm and then list the entity in Hong Kong.

The consolidated firm is expected to be valued at more than three times China Oilfield Services (2883) - a unit of CNOOC Ltd (0883) - another state- owned petroleum giant.

Market capitalization of China Oilfield Services, which mainly offers engineering services to offshore oil companies, hit HK$78.5 billion yesterday.

In other action, Perfect Shape (PRC) Holdings is to become Hong Kong's first IPO in the Year of the Dragon. Trading is expected start on February 10.

The slimming and beauty service provider slashed its fund-raising target by more than 51 percent to HK$220 million.

Perfect Shape will open its retail book today. Minimum spending for one board lot of 4,000 shares is HK$3,555.48.

But brokers expect a moderate response from retail investors.

"The equity market is still full of uncertainties, and investors will wait and see how the next IPOs fare,"said Bright Smart Securities chief executive officer Nelson Chan Kai-fung. "Listing will be easier if the Hang Seng Index could stay above 20,000 during the first quarter."

Chan said Smart Securities has not prepared extra margin orders for Perfect Shape.

Separately, Haitong Securities will reconsider its H-share selling plan after releasing 2011 results in March.

In November, the mainland brokerage tried to raise up to HK$13 billion by selling 1.23 billion shares.

Eight gear up to target $19b from local bourse
The Standard
Friday, January 27, 2012

Eight companies are lining up to float shares in initial public offerings in the next few weeks, raising a combined HK$19.4 billion.

The biggest issuer in the pack is Shanghai Fosun Pharmaceutical, which plans to raise up to HK$6.2 billion. The Shanghai-listed company specializes in modern biological, medical and health products and is a subsidiary of Fosun International (0656).

Shares of Fosun Pharmaceutical last traded on January 20 at 8.8 yuan (HK$10.78), representing a market cap of 16.8 billion yuan. In comparison, Shanghai Pharmaceuticals Holdings (2607) had a market cap of HK$37.6 billion. Since its HK$15.2 billion listing last May, Shanghai Pharma shares have dived, closing yesterday at HK$13.38 - 41.8 percent below the offer price of HK$23.

Meanwhile, Canada's Sunshine Oilsands is seeking to exploit China's interest in oilsands through a local listing. The company aims to raise up to HK$5.46 billion next month. Its listing plan was approved last week.

Separately, three firms that put off their share issues last year are also gearing up for IPOs.

TV drama maker Hairun Media and Entertainment begins bookbuilding next week.

China's largest privately owned TV drama maker hopes to raise up to HK$1.56 billion.

Macau-based high-end brands distributor Rainbow Group and slimming and beauty services provider Perfect Shape (PRC) Holdings are also waiting in the wings.

New candidates include Shanghai bakery chain Christine Foodstuff and financial services provider Golden Bridge United Financial Leasing Corporation, which seek to raise HK$468 million and HK$1.56 billion, respectively, next month.

Two Chinalco units to list in HK
The Standard
Friday, February 03, 2012

Chinalco, the parent of Aluminum Corporation of China, also known as Chalco (2600), plans to list its engineering unit in Hong Kong.

China Aluminum International Engineering Corporation aims to raise up to HK$3.9 billion in March or April.

It is mainly involved in infrastructure construction and engineering in the mainland. Chinalco is also preparing to spin off its Peru copper mining project in the third quarter, eyeing HK$7.8 billion. The project, in central Peru, is due to start by the end of next year. Annual output is estimated at 250,000 tonnes.

Chinalco, the mainland's largest aluminum producer, has diversified its assets recent years to offset decreasing profits from copper mining.

On Monday, Chalco posted a profit warning, saying net income for last year would dive 50 percent due to rising costs and falling copper prices.

In other action, Perfect Shape (PRC) Holdings - the first IPO in the Year of the Dragon - ends book building today.

Its retail book was oversubscribed by 15 times, luring HK$357.5 million in margin orders. Eleven investors signed up for shares worth HK$11 million each, the maximum allowed, brokers said.

It aims to raise HK$220 million and has a greenshoe option of 37.5 million shares. Trading is due next Friday.

IPOs line up to tap billions
The Standard
Thursday, February 09, 2012

Several multi-billion-dollar flotations are in the works for the next few months.

Shanghai Fosun Pharmaceutical Group aims to raise up to HK$6.24 billion in the second quarter.

The Shanghai-listed company is one of the four pillar business units of conglomerate Fosun International (0656).

Specializing in modern biological medical and health products, Fosun Pharmaceutical is also the controlling shareholder of leading drugs distributor Sinopharm Group (1099).

Guotai Junan International research analyst John Sun Fengqiang expects Sinopharm to report stable annual earnings in March.

This, he said, would have a "positive impact on Fosun Pharmaceutical's H-share valuation." Fosun Pharmaceutical A shares closed at 8.79 yuan (HK$10.8) yesterday.

Separately, state-owned China Nonferrous Metal Mining (Group) Corporation plans to spin off its Africa copper asset before May.

It was earlier reported that it aimed to raise up to HK$7.75 billion from the offering. Net profit of the asset is expected to hit 2 billion yuan this year.

Also, SAR-based Beauty Group is seeking to raise up to HK$2.3 billion in the first half.

The company is controlled by local businessman Raymond Liu King-bong. It also distributes luxury labels including the Versace Collection.

Some smaller companies are also in the initial public offering pipeline. Zibo Yinshilai Textile Corporation is seeking to raise up to HK$775.4 million in the first half. The Shandong-based company is engaged in weaving, dyeing and finishing for high-grade pure cotton and chemical woven fabrics.

Meanwhile, Perfect Shape (PRC) Holdings, which will begin trading on Friday, announced its final allotment.

The retail tranche was oversubscribed by 33 times, while the international portion was also oversubscribed. Each investor who subscribed to one board lot of 4,000 shares will be allotted shares.

Net proceeds are estimated at HK$183.9 million. The company priced its shares at HK 88 cents.

SFC to seek views on IPO due diligence
The Standard
Friday, February 24, 2012

The Securities and Futures Commission will seek public views by early April on whether sponsors of initial public offerings should take more responsibility for due diligence.

This comes in the wake of a rising number of newly listed firms failing to perform shortly after listing. In some cases, dubious information was found in listing prospectuses.

This public survey - plus all subsequent follow-ups - is the first major task for Ashley Alder, who became SFC chief executive in October.

Brian Ho Yin-tung, executive director of corporate finance at the SFC, said responsibilities of IPO sponsors should be similar to those of company directors.

But as to whether sponsors should be held criminally liable for inaccurate disclosures - an area strongly opposed by the industry - Ho said the SFC has not taken a stance on the issue.

He added the SFC will study if it needs to create a separate code of conduct for sponsors in addition to the existing code for all licensed persons.

Meanwhile, the SFC will deliver a new budget for the next financial year to a Legislative Council panel on March 1. Lawmakers rejected the last budget, expressing surprise at the SFC's high reserves and lack of proposals to cut securities transaction fees.

Oilsands play opens retail book
The Standard
Monday, February 20, 2012

Canada's Sunshine Oilsands opens for retail subscriptions today aiming to raise HK$4.69 billion in an initial public offering.

During the roadshow last week, the company secured HK$2.7 billion, or 58 percent of the total proceeds, from three cornerstone investors - state-owned China Investment Corp, Sinopec (0386) parent Sinopec Group, and US asset manager EIG Global Energy Partners.

Sunshine's offering may not be as appealing to retail investors as it has been to institutional investors.

According to its listing document, the firm forecast a net loss of C$68.7 million (HK$534.4 million) in 2011 due to spending on basic construction of different projects. Although the firm controls 464,894 hectares of oil sands leases in seven regions in Athabasca, it has yet to begin commercial output.

Besides, it has recorded net losses since its establishment in 2007. The firm also faces heavy investment this year and next as total capital expenditure is seen at C$723 million.

But president and chief executive officer John Empey Zahary said: "We are optimistic about the outlook as many projects are gearing up for production." Its conventional heavy oil project Muskwa is expected to produce 1,600 to 1,800 barrels per day by the end of the year. West Ells, one of its key projects, is expected to enter initial production in the second quarter of 2013.

Minimum spending for one board lot of 500 shares is HK$2,565.6. Book building ends at noon on Thursday.

Separately, Christine International Holdings and Xiwang Special Steel have priced their issues at the lower end. They debut on Thursday.

Trigiant cuts target in IPO revival
The Standard
Monday, March 05, 2012

Trigiant Group, a maker of radio frequency co-axial cable that has revived a public float, re-opens for retail orders tomorrow with the aim of raising up to HK$375 million.

After first planning for HK$780 million in the fourth quarter of last year, Jiangsu-based Trigiant has now set an indicative range of between HK$1.1 and HK$1.5 per share.

Founded in 2007, it makes cables to receive and transmit radio signals at base stations and accessories for telecom firms.

Major customers China Mobile (0941), China Unicom (0762) and China Telecom Corp (0728) accounted for more than 90 percent of revenue in the past three years.

Last year, net profit rose 36.7 percent to 206.8 million yuan (HK$254.7 million) from 2010.

Trigiant plans to expand capacity by 20 percent to 180,000 kilometers of cable annually from the current 150,000km.

In other action, China Putian Food Holding ends book building today. The retail book of the hog supplier was oversubscribed by two times as of Friday. A member of the China Agri-industries Holdings (0606) management has invested in the float.

And China Agri-Industries Holdings, the flagship firm of the COFCO Group, plans to list its commercial property assets here.

Hong Kong: The Listing Venue of Choice
Tuesday, March 6, 2012
Government Press Release

Hong Kong is the "Listing Venue of Choice". One of the reasons is the Hong Kong Exchanges and Clearing Limited (HKEx) ranked No.1 in Initial Public Offering (IPO) funds raised for three consecutive years, according to the Assistant Vice President of the Issuer Marketing Department of HKEx, Mr Michael Chan.

Speaking today (March 5, Toronto time) at a business luncheon in Toronto, Mr Chan said despite the negative global economic environment, Hong Kong has dominated the IPO market since 2009. In 2011, about US$33 billion IPO funds were raised in Hong Kong. "HKEx has been among the top five global listing markets since 2002. Its strong track record reflects the market's liquidity, breadth and depth - a critical factor for potential issuers to choose the listing destination," he said.

The luncheon, hosted by the Hong Kong Economic and Trade Office (HKETO) in Toronto, together with the Hong Kong-Canada Business Association (HKCBA) (Toronto Section), was attended by more than 100 representatives from the local financial sector.

Mr Chan also cited the example of Calgary's oil explorer Sunshine Oilsands Limited which has entered the Hong Kong market with the biggest IPO so far this year in the Asian financial market. The other major international corporations, which have taken HKEx's competitive advantage for international listings in recent years, included AIA, Glencore, Prada, Rusal, Samsonite and MGM China, etc.

"HKEx is the market of choice in Asia for companies seeking to go public and raise funds," said Mr Chan. "Hong Kong is ranked the No.1 global IPO market for three consecutive years and regarded as the world's top international financial centre by the World Economic Forum. Besides, Wall Street Journal ranked Hong Kong the No.1 free economy in the world. The Economist Intelligence Unit and Ernst & Young also named Hong Kong the No.1 globalised economy."

He added that Hong Kong is also the designated RMB offshore centre with support from the Chinese Central Government. By end of 2011, Hong Kong RMB deposits have been accumulated to RMB627 billion.

"As China's international financial centre, Hong Kong is the country's key link to the global market and plays a pivotal role in the Mainland's economic development," he said. "We have an established legal system, favourable tax regime and financial infrastructure. "We also maintain a strong and transparent regulatory framework and an accessible financial platform."

In her remarks at the luncheon, the Director of the HKETO, Miss Gloria Lo, also said that Hong Kong would continue to consolidate its global fund raising platform, seeking to attract and facilitate listing and secondary listings in Hong Kong by overseas companies.

"Financial service is one of the four pillar industries in Hong Kong," said Miss Lo. "Hong Kong enjoys a close economic and trade relations with Canada and we would always welcome interested Canadian companies to list in Hong Kong."

Speaking at the luncheon today also included the Honorary Advisor of the Federation of Hong Kong Business Associations Worldwide, Mr David Matheson.

Canadian Oil-Sands Producers Considering Hong Kong Listings
By Jeremy van Loon - Mar 6, 2012 8:00 PM GMT+0800
Bloomberg

Canadian oil-sands producers are considering following Sunshine Oilsands Ltd. in raising capital on the Hong Kong stock exchange to take advantage of Asian energy demand, a lawyer working with the companies said.

The transactions could involve initial public offerings or secondary listings, said Rick Pawluk, a partner at McCarthy Tetrault LLP in Calgary and adviser to Sunshine Oilsands on their Hong Kong IPO. The deals would raise “hundreds of millions” of dollars for the Calgary-based companies, he said, declining to identify them.

“At the moment there are more pools of capital in that part of the world,” Pawluk said in a phone interview yesterday. “Management has to be more flexible in how to raise capital. North America is not an automatic choice anymore -- you have to look at other markets.”

Chinese interest in Canada’s oil sands led Cnooc Ltd. (883) to pay $2.1 billion in cash and debt for Opti Canada Inc. last year. Oil-sands production is expected to more than double to 3.7 million barrels a day by 2025, according to the Canadian Association of Petroleum Producers.

Sunshine Oilsands raised HK$4.49 billion ($580 million) in a Hong Kong initial public offering on March 1. Most of the proceeds will fund the Calgary-based company’s oil-sands development. China Investment Corp. (CHIVCZ), the nation’s sovereign wealth fund, agreed to buy $150 million of stock and hold onto it, according to the prospectus. The shares have declined 4.7 percent since their debut.

“More investment by Asian investors will definitely speed the rate at which assets are developed,” said Robert Mark, an energy analyst for MacDougall, MacDougall & MacTier Inc., a Montreal-based investment firm. “This is Economics 101. Asians have capital account surpluses and are short on commodities. It’s a natural match.”

Everbright Bank can list in the SAR
The Standard
Friday, March 09, 2012

China Everbright Bank has been given the green light from the mainland regulator to revive its initial public offering in Hong Kong, but management is awaiting more positive signals from the equity market.

"We are still on the lookout for a proper time for the IPO, and we will actively seek multi-channel financing to replenish capital this year," chairman Tang Shuangning said yesterday.

In July last year, the mid-sized bank pulled its share offering which aimed to raise HK$46.8 billion. And by year's end the bank even halved the amount it planned to raise before postponing the offer.

An investment banker said the current volatility was not conducive to a public float, adding that the Beijing-based bank was unwilling to offer the lower price.

The Shanghai-listed bank closed 0.33 percent higher at 3.02 yuan (HK$3.7) yesterday.

Radio frequency co-axial cable maker Trigiant Group - which ends bookbuilding today - has so far lured HK$1 million in margin orders or just 2.6 percent of its total retail target of HK$37.5 million. Some investors have canceled orders, brokers said.

Separately, the privately operated mainland hotel chain New Century Hotels and Resorts is seeking a local listing hearing later this month.

The company operates 90 luxury hotels and resorts in 18 provinces and cities. It aims to raise up to HK$1.94 billion.

Haitong Securities to bid for IPO
The Standard
Wednesday, March 14, 2012

Management of China's second-largest broker Haitong Securities will meet the local regulator tomorrow as it seeks to raise up to HK$11.6 billion through an initial public offering.

The broker shelved its Hong Kong IPO plans in December, having set an indicative price of between HK$9.38 and HK$10.58 per share.

This potential deal could turn Haitong's public float into the first mega-IPO this year.

Subsidiary Haitong International Securities Group (0665) reported earnings yesterday.

The locally based broker booked HK$153.2 million net profit in the year ended December 2011, versus HK$345.8 million for the 18 months ended December 2010. But its broking business fared poorly.

Revenues fell 14 percent to HK$443.13 million from 2010 as equity markets tumbled sharply in the second half of 2011. The broker announced a full-year dividend of 8 HK cents. Earnings per share was 19.37 HK cents.

Mainland construction machinery giant Sany Heavy Industry - an affiliate of Sany Heavy Equipment (0631) - has shown interest in selling shares in Tokyo. The firm first planned to raise up to HK$23.3 billion in Hong Kong in the last quarter. No underwriters have been chosen, a source said.

IPO candidate Inner Mongolia miner Kinetic Mines & Energy, which began retail subscriptions yesterday, drew HK$60,000 in margin orders from retail investors.

The company is targeting up to HK$1.4 billion by selling 930 million new shares.

The international tranche is fully covered, with 18.4 percent subscription from Sany Heavy Equipment (0631) as cornerstone investor.

BoCom to Raise $8.9 Billion in Shanghai, Hong Kong Sales
By Bloomberg News
Mar 16, 2012 12:07 AM GMT+0800

Bank of Communications Co., China’s fifth-largest lender, plans to raise 56.6 billion yuan ($8.9 billion) in the world’s biggest share sale since May.

China’s Ministry of Finance and HSBC Holdings Plc (HSBA), the Shanghai-based bank’s two largest shareholders, will take part in the private placement, according to a filing to the Hong Kong Stock Exchange yesterday. The lender’s board approved selling new Shanghai- and Hong Kong-listed shares.

BoCom joins rivals including Industrial Bank Co. (601166) in seeking funds after a two-year, $2.7 trillion lending spree sapped their finances. China’s banking regulator is planning tougher capital requirements for the biggest lenders to fend off rising credit risks.

“BoCom will become the most-capitalized bank among big lenders in China,” said Sheng Nan, a Hong Kong-based analyst at CCB International Securities Ltd., who estimated the offering will boost its core capital adequacy ratio by about 2 percentage points. “Participation of the government shareholder and HSBC ensures this is a long-term investment and there will be no additional stock supply to depress the market.”

The lender will sell 6.54 billion new Shanghai-traded shares to seven investors including the Finance Ministry and China’s National Council for Social Security Fund at 4.55 yuan apiece, and 5.56 billion new Hong Kong-traded shares for HK$5.63 each to buyers such as HSBC, BoCom said. The company will also place 275.7 million shares in Hong Kong on a fully underwritten basis at the same price, it said.

HSBC Stake

HSBC will pay about $1.71 billion for 2.36 billion Hong Kong-listed shares, keeping its stake at no less than the current 19.03 percent, the London-based lender said in an e- mailed statement yesterday. The bank will pay for the shares with cash from internal resources, it said.

China’s Finance Ministry will increase its stake to 26.53 percent from 26.52 percent following its purchase of shares listed in both Shanghai and Hong Kong, BoCom said in its regulatory statement.

The China Banking Regulatory Commission said in August that it will require the country’s largest, or so-called systemically important, lenders to have a minimum capital adequacy ratio of 11.5 percent by the end of 2013. Smaller banks will be required to have at least 10.5 percent under “normal conditions” by the end of 2016, the CBRC said.

Capital Adequacy Declines

“The main purpose of the proposed placing is to increase the capital adequacy ratio by replenishing core capital,” BoCom said in the filing yesterday.

BoCom’s capital adequacy ratio fell to 11.89 percent as of Sept. 30 from 12.36 percent at the beginning of 2011, according to its third-quarter earnings report. The bank’s core capital adequacy ratio dropped to 9.24 percent, lower than the 9.5 percent mandatory minimum under the new capital plan.

At $8.9 billion, BoCom’s share sale would be the largest since Glencore International Plc raised $9.9 billion in an initial public offering in May, according to data compiled by Bloomberg.

The bank’s shares will resume trading today in Hong Kong, it said in the statement.

Shares of BoCom have gained 14 percent this year to close at HK$6.19 March 14. The stock traded 5.8 times its estimated earnings in 2012 and 1 times estimated book value for the year, according to data compiled by Bloomberg.

BoCom may report later this month a record profit of 48.3 billion yuan for 2011, an increase of 24 percent from a year earlier, according to the average estimate of 18 analysts in a Bloomberg survey.

Industrial Bank, a Chinese lender part-owned by Hang Seng Bank Co., said earlier this month it will raise as much as 26.4 billion yuan in a private placement.

Standard & Poor’s warned this week that China’s banks could face a slump in 2012 as the economy slows, property prices fall and “sizable” local government debt requires refinancing.

Sudan sugar maker Kenana plans Hong Kong IPO
March 18, 2012

KHARTOUM (Reuters) - Kenana, Sudan's biggest sugar company, is planning to raise $200 million listing a quarter of its shares in Hong Kong in December, to finance new projects.

Kenana wants to more than double output to over 1 million tonnes annually and establish itself as a major exporter, managing director Mohamed El Mardi told Reuters in an interview.

Sudan, one of Africa's largest sugar producers after Egypt and South Africa, imports more of the sweetener than it exports because of strong local demand. Officials hope new factories and other improvements will reverse that by 2014.

Rising sugar exports would also help the country make up for losing three quarters of its oil output when South Sudan seceded last year, fuelling a foreign currency shortage in the north. Oil used to account for about 90 percent of Sudan's exports.

Mardi said Hong Kong was a logical place to list Kenana because of growing Chinese investor interest in Sudan's agricultural sector.

"We are targeting to finance all our new Kenana projects, and we are expecting to raise around $200 million."

Mardi said the company had consulted the exchange about any impact of U.S. trade sanctions, in place since 1997, and did not expect them to affect the listing.

Set up in the 1970s with the Lonrho conglomerate, which entrepreneur Roland Rowland led at the time, Kenana is now owned mostly by Kuwait, Saudi Arabia and Sudan.

The firm, which has expanded into fields including ethanol, animal feed, equipment manufacturing, forestry and farming, has $600 million annual revenue and aims to raise that to $1 billion by 2014, Mardi said.

EXPANSIONS AND EXPORTS

Kenana expects to produce 390,000 tonnes of sugar in the 2011-12 season at its plant in White Nile state, Mardi said.

Production should rise to about 400,000 tonnes next season, and 450,000 tonnes by 2015, after the cultivation of another 9,000 acres, he said.

Two new plants are also due to open in the next few years. One, El Ramash, in Sennar state should start producing 120,000 tonnes in 2013-14 season, while another called Redais will start making 500,000 tonnes of raw sugar in 2014-15, Mardi said.

Chinese investors including Complant, also known as China National Complete Plant Import and Export Corporation, will hold stakes in the Redais project.

Kenana is also in talks with South African group Illovo about taking a stake, Mardi said.

"At the moment we are discussing with them (Illovo) how to accommodate them in the equity. We are more receptive to include them because of the business relationship ties between Kenana and Illovo ... (and) because Illovo is also the biggest sugar company in South Africa."

For the past few years, Kenana has sold all but a fraction of its sugar in Sudan to help meet demand of about 1 million tonnes a year and maintain a 200,000-tonne strategic reserve, Mardi said.

The launch in April of the White Nile Sugar Co, in which Kenana holds the largest stake, should help supply the local market and allow Kenana to step up exports by 2014 - a boon because of the gap between the domestic and international prices, Mardi said.

Sudan's sugar producers sell to wholesalers and retailers at a price the government has fixed at the same rate for the past six years, he said.

"By next year the White Nile sugar project will be producing around 250,000 tonnes," Mardi said.

"We expect with the commissioning of the White Nile ... Sudan will restore self-sufficiency with a rapid increase in the production of the existing sugar industry. Kenana exports will increase rapidly during the coming years."

Two gear up for share placement
The Standard
Tuesday, April 03, 2012

An energy firm and a casino operator are selling shares, taking advantage of the more than 10-percent advance in the equity market during the first quarter.

Kunlun Energy (0135), a gas unit of PetroChina (0857), will sell up to HK$10.8 billion of shares to expand its liquefied natural gas operations.

The company is offering 800 million shares at HK$13 to HK$13.5 per share, representing a discount of 4.8-8.5 percent from yesterday's close of HK$14.18. Proceeds will amount to about a 10th of the firm's market value.

The company plans to build 15 LNG plants, becoming China's largest onshore LNG supplier and producer.

Meanwhile, Chen Lip Keong, chief executive and major shareholder of Cambodian casino and hotel operator NagaCorp (3918) is set to sell a stake of more than 10 percent in the company for up to HK$680.5 million.

Fourth Star Finance Corp, a trust that Chen operates, is selling 214 million shares for between HK$3.04 and HK$3.18 per share, Bloomberg reported.

That represents a discount of 8.6-12.6 percent from Monday's close of HK$3.48.

The total number of ordinary shares of NagaCorp were valued at 2.1 billion yuan (HK$2.5 billion) at year's end.

Matthew Kwok Ka-yiu, the deputy head of research at Haitong International, said the time was right for shareholders to realize gains following solid earnings for 2011.

The firm, which runs Phnom Penh's only licensed casino, reported income of US$92 million (HK$714.4 million) for 2011, up more than 100 percent.

Volatile markets knock IPOs
The Standard
Tuesday, April 10, 2012

High volatility in global equity markets dried up demand for local listings, which raised 40percent less capital in the first quarter from the same period a year back.

But leading global markets have fared worse in new listings.

Eighteen small- to mid-sized companies went public in the three months to March, raising HK$9.74 billion.

In contrast, a dozen new listings raised HK$16.4 billion in the same period of 2011, including mega-listings China Hongqiao Group (1378) and Far East Horizon (3360), which raised more than HK$5 billion each.

Initial public offerings in the United States and China plunged 55percent and 67percent respectively in the three months to March.

According to Ernst & Young, 157 new listings raised HK$111 billion globally - down by 69percent.

Hong Kong, the top IPO market globally from 2009 to 2011, had a poor start this year.

Three new listings - Sunshine Oilsands (2012), Xiwang Special Steel (1266) and Kinetic Mines and Energy (1277) - accounted for more than 70percent of the total amount raised in Hong Kong.

By Thursday, eight of 17 floats - excluding Swire Properties (1972), which listed by introduction - traded below their offer prices.

Meanwhile, Jiangnan Group opens its retail book a week today.

The Jiangsu-based firm makes wires and cables and its customers include China Petroleum and Chemical Corporation (0386).

Jiangnan also supplies power cables to a state-owned company in South Africa, which made up 6.1percent of total revenue last year.

By pricing each share between HK$1.42 and HK$2.05, the company aims to raise up to HK$788.8 million.

About half the proceeds will be for expanding high-margin cable products and upgrading existing facilities.

And three new production lines go on stream in the first half of 2013.

Another 20 percent of funds will be used to build a factory in South Africa, with construction starting in the second half.

Subscription for one board lot of 2,000 shares costs HK$4,141.33, including fees. Trading is due to start on April 20 under the ticker 1366.

Mainland broker looks to relaunch flotation
The Standard
Friday, April 13, 2012

Haitong Securities is preparing to relaunch its H-share initial public offering next week with the issue price revised downward.

The second-largest broker in the mainland will kick off the public float on Tuesday with an indicative price range of between 8.51 yuan and 8.92 yuan per share (HK$10.50 to HK$11), 17 percent below its A-share closing price at 10.22 yuan yesterday.

Haitong suspended its proposed HK$13 billion initial public offering at the end of last year due to market volatility. At the time, the company set a price of between HK$9.38 and HK$10.58 per share.

Its A shares have gained 38 percent this year, rebounding from a 20 percent slump in November and December.

So far, the company has attracted HK$4.7 billion from cornerstone investors. It aims to sell at least half of the shares to strategic or anchor investors.

Separately, precision equipment engineering services company CW Group will start trading today under the ticker 1322. But there was not much interest in the small cap in the gray market yesterday. The Singapore-based company raised HK$216 million by pricing its shares at the bottom of the indicative range at HK$1.33.

Also, electric wire and cables manufacturer Jiangnan Group ends bookbuilding at noon today, targeting HK$788.8 million.

In other action, Shanghai and Shenzhen exchanges invited 2,000 retail investors to join a discussion about IPO pricing reforms, China Securities Journal reported. Two listing candidates have been chosen.

Giant Haitong IPO open for orders
The Standard
Tuesday, April 17, 2012

The mainland's second-largest broker, Haitong Securities, begins accepting retail orders today for its HK$13.74 billion public float that is shaping up to be the biggest so far this year.

The Shanghai company raised the upper end of the initial price range to HK$11.18 per share and expanded the offer to 12.29 million shares.

The H-share offer, with an indicative price of between HK$10.48 and HK$11.18 per share, represents a discount of 11.13 percent to Haitong's A shares, which closed at 10.23 yuan (HK$12.58) yesterday.

The heavyweight deal has secured 11 cornerstone investors who will subscribe to shares worth HK$4.5 billion, or 33 percent of the float.

One strategic investor - private equity firm PAG - is buying shares worth HK$2.3 billion.

Local lender Dah Sing Bank (2356), New York-based asset manager DE Shaw & Co, and Japan's financial services company SBI Holdings are also among strategic investors.

Haitong will allot 95 percent of the issue to institutions, leaving the remaining 5 percent - or 61.47 million shares - for local retail investors.

Trading in Haitong shares is set for April 27.

Separately, Shandong-based iron ore miner China Zhongsheng Resources Holdings also opens its retail book today. The privately held company is targeting HK$197.2 million by selling 129.8 million shares.

More than half the proceeds will be used to double production capacity of its only mine under operation to 3.5 million tonnes a year by the end of 2013. One board lot of 2,000 shares will cost HK$3,070.

Also, mainland menswear designer and retailer Cabbeen plans to raise up to HK$1.56 billion this year.

The company, founded in Hong Kong in 1989, is a mid-to-high end menswear brand operating retail networks in the mainland, Southeast Asia and the United States.

港股兩月集千億 抽水潮未完
高盛配售工行套200億 淡馬錫接9成貨
2012年04月17日 星期二
經濟日報

http://www.hket.com/store/IMAGE/HKET/2012/201204/20120417/HKET20120417AA01ATL.jpg

http://www.hket.com/store/IMAGE/HKET/2012/201204/20120417/HKET20120417AA01BTL.jpg

http://www.hket.com/store/IMAGE/HKET/2012/201204/20120417/HKET20120417AA01CTL.jpg

千億元集資潮，成港股絆腳石。連同昨日高盛配售工商銀行（01398）套現195億元在內，於近一個半月內，15家公司集資抽水逾1,000億元（見表）。投資界指，集資活動仍陸續有來，為港股短綫構成壓力。

股本融資飈78% 大市成交反減

市傳配售工行多時的高盛，昨終於行動，以每股5.05元的價格（較上周五收市價折讓3.1%），配售所持舊股，套現25億美元（折算約195億港元）。

配售當中的大部分逾9成約23億美元，由新加坡淡馬錫接貨（詳見另文——內銀大買家 淡馬錫「高沽低揸」）。據了解，餘下2億美元的工行股份，於昨開市前獲火速認購。高盛上一次減持工行為去年11月，當時配售價介乎4.88至5元。工行昨跌0.8%，收報5.17元。

按彭博社資料，加上昨日高盛配售工行交易，年初至今的股本融資額，按年已急增近78%到1,194億元。值得留意是，同期港股今年日均成交卻由768億元減到620億元。

在大市交投淡靜下，更多配股活動集中搶資金，無疑限制對其他股份的購買力，拖慢大市升勢。

近個半月的配股中，大股東賣舊股套現，較公司發新股集資發展更多。除高盛外，友邦股東AIG亦套現468億元，償還所欠美國政府債務，金界（03918）股東更以15%的大折讓減持套現。

美資基金：不少經紀找人接貨

有美資基金經理稱，近日獲不少資本市場銀行家及經紀等接觸，試探其對新股或配售股份的興趣。他預料，相關集資活動短綫仍會陸續有來，為大市構成不少壓力。

展望後市，捲土重來的海通證券（新上市編號：06837）將於今日起重啟招股，目標集資137億元，成今年來集資額最高新股。交行（03328）亦已公布於H股配股，集資327億元，連同招行（03968）A+H集資約350億元，仍尚待完成，屆時難免拖低恒生指數。

有券商推測今年內銀股於A股及H股須集資逾3,000億元，以補充資本。有保險基金經理認為，經濟放慢令壞帳上升的不良影響，仍未於內銀股帳目中反映，恐怕內銀短綫股價調整仍未完。

Big four back Haitong IPO
The Standard
Wednesday, April 18, 2012

Haitong Securities has attracted four mega-anchor investors to take part in its Hong Kong initial public offering.

State-owned China Investment Corporation, Singapore sovereign wealth fund GIC, China Life Insurance (2628) and Ping An Insurance (2318) will back Haitong's H-share offer, which is seeking as much as HK$13.74 billion.

Japanese financial services company SBI Holdings (6488) - one of 11 cornerstone investors - said yesterday it will consider working with Haitong in China and other Asian countries.

Total contribution from cornerstone investors amounted to HK$4.5 billion, or 33 percent of the flotation.

But investors applied for HK$5.1 million worth of margin orders, representing just 0.7 percent of Haitong's retail target, brokers said.

Bookbuilding ends on Friday.

In other action, miner China Zhongsheng Resources Holdings started accepting retail subscriptions yesterday but failed to attract any margin orders.

Separately, China Nonferrous Metal (Group) said it plans to list its Zambia copper mines, seeking around HK$3.9 billion.

Meanwhile, system integration service company Synertone Communication Corporation (1613) starts trading today, raising HK$99 million at a share price of HK$0.33.

In the gray market, Synertone closed 6 percent higher at HK$0.35. A board lot of 8,000 shares gained HK$240.

Investor Distrust of Chinese Listings Hits IPOs, Prices
By Fox Hu - Apr 19, 2012 6:00 AM GMT+0800
Bloomberg

Profit warnings, auditor disputes and delistings involving Chinese companies trading on foreign exchanges are fueling investor distrust, wiping out valuations and poisoning the market for new listings.

The 180 Chinese firms that went public in New York, Hong Kong and on other global exchanges since the start of 2010 are trading on average 21 percent below their offer prices, according to data compiled by Bloomberg. The MSCI World Index (MXWO) has gained 10 percent in the same period, while the 407 initial public offerings in the U.S. since the beginning of that year have advanced on average 4.4 percent.

At least six disputes have broken out this year between auditors and Chinese companies listed in Hong Kong. More than a quarter of Chinese firms that went public on the city’s main board in 2010, a record year for volume, have lowered forecasts since they started trading, compared with less than 10 percent of non-Chinese companies that had IPOs there that year.

“Investors have been concerned: Are these companies accurately portraying themselves?” said Kevin Pollack, a fund manager at Paragon Capital LP in New York who invests in U.S.- listed Chinese stocks. “There has absolutely been collateral damage. Unfortunately, having big-name auditors and bankers behind a company doesn’t guarantee it’s free of issues.”
Deloitte Resigns

Investor enthusiasm that allowed a record number of Chinese companies to go public abroad in 2010 has evaporated as the accuracy of financial reporting and the quality of due diligence by IPO underwriters has been called into question. That contributed to making the first quarter for global first-time offerings the weakest since the depths of the financial crisis.

Confidence in overseas-listed Chinese stocks had already been undermined by scandals involving companies that went public in the U.S. through so-called reverse mergers. Now, investors are shunning firms based in the world’s fastest-growing major economy: Of the 57 IPOs in the U.S. this year, only one came from China, compared with seven in the first quarter of 2011.

Four Hong Kong-listed Chinese firms, including Boshiwa International Holding Ltd. (1698), a Shanghai-based Harry Potter apparel licensee, said their auditors resigned this year because of disputes over financial data or other key information. That’s four times the number in the same period last year and in the first quarter of 2010. Two other companies reported that their auditors needed more time to verify earnings.

Boshiwa, whose shares fell 66 percent from their September 2010 listing price, was suspended from trading March 15 after accounting firm Deloitte Touche Tohmatsu resigned.
Hong Kong Warnings

The disclosures caused Hong Kong’s Financial Reporting Council to announce April 11 that it had identified 13 Chinese companies in need of close monitoring. The agency, which investigates auditing and reporting irregularities of publicly traded companies, declined to name them.

Chinese companies listing on global exchanges in 2010 set a record: 110 IPOs, up from 67 in 2009 and almost twice the number last year. That prompted Hong Kong regulators to warn at least eight times since early 2011 about inadequate due diligence on the part of investment bankers who underwrote the IPOs of companies that applied for listings in 2010.

Overseas IPOs by Chinese firms in 2010 accounted for 16 percent of the $199 billion in global IPO proceeds, excluding mainland China deals, the data show. In the first quarter of this year, foreign Chinese offerings fell to 5.7 percent of the $11 billion raised worldwide.

More : http://www.bloomberg.com/news/2012-04-18/investor-distrust-of-chinese-listings-hits-ipos-prices.html

First blood in IPO sponsor crackdown
The Standard
Monday, April 23, 2012

The Securities and Futures Commission has imposed its heaviest-ever penalty on the sponsor of an initial public offering for failing to measure up.

It comes as the commission gets tougher with shoddy work by sponsors of IPOs amid fraud scandals involving several locally listed mainland enterprises.

The SFC announced yesterday that Mega Capital (Asia), underwriter for the troubled Hontex International Holdings (0946), has been stripped of its sponsor's licence - a first for the watchdog - and fined a record HK$42 million for substandard work on due diligence.

The Fujian-based fabric maker controlled by Taiwan businessman Shao Ten-po was listed in 2009.

But the SFC halted trading after three months as it found "materially false and misleading information" in Hontex's listing prospectus.

Then came word yesterday that Mega fell short as a sponsor, with a lack of due diligence work.

"The sanctions imposed on Mega Capital should make it clear that the SFC condemns such failure in the strongest terms," said Mark Steward, the SFC's executive director of enforcement.

On Mega not acting independently, the SFC said all interviews with Hontex clients were arranged by Hontex itself and conducted in the presence of its representatives.

Also, most due diligence work was done by unsupervised juniors, while there was a lack of records to show the sponsor conducted checks on Hontex suppliers, customers and franchisees.

But there was no evidence of fraud involving the sponsor.

The SFC has frozen about HK$997.4 million Hontex raised from its initial public offering and applied to a court to return the money to its IPO subscribers - a case that restarts on June 4.

Meanwhile, an SFC spokesman revealed the commission is probing other IPOs.

Some new listings - including Boshiwa International (1698) - have been involved in accounting discrepancies.

Also, some firms have seen auditors resign, while others have sought to delay financial reporting without good reason.

Worried that investors might stay away, the SFC has taken a series of actions, including consultations on the role of sponsors.

Among questions it has asked is whether sponsors should be criminally liable for failing to discharge their responsibilities.

But the industry remains strongly opposed to that.

HKEx is also acting, issuing details last week on tighter rules for disclosure of planned uses of listing proceeds.

Shanghai bank eyes dual float
The Standard
Monday, April 23, 2012

The Bank of Shanghai is preparing to launch a Hong Kong and Shanghai dual H- and A-share listing soon.

Shareholders on Friday approved the H-share offering.

The mainland's second-largest commercial lender aims to sell 1.2 billion H shares, or at least 15 percent of the enlarged total shares.

The A-share portion - involving a similar number of shares - is under review by mainland regulators.

"We would like to list in either destination, or even both," said vice president Zhang Weiguo. "The proceeds will be used to boost capital to meet regulatory requirements."

He added the bank needs about 36 billion yuan (HK$44.3 billion) to maintain its present capital adequacy ratio and core CAR. Both levels were higher than required at the end of last year.

LCQ20: Monitoring of mainland private enterprises listed in Hong Kong
Wednesday, April 25, 2012
Government Press Release

Following is a question by the Hon Frederick Fung Kin-kee and a written reply by the Secretary for Financial Services and the Treasury, Professor K C Chan, in the Legislative Council today (April 25):

Question:

Quite a number of companies published their results in recent months, and among them many mainland private enterprises listed in Hong Kong have encountered financial and auditing problems (including resignation of auditors owing to queries about the veracity of the accounts, sharp increase in short-term debts, non-business related losses incurred from participating in financial derivative activities, or deferrals in publishing results because of unclear accounts), leading to substantial volatility of their share prices, and investors suffer losses. Further, such cases have also aroused concern of the market, alleging that the standards of corporate governance of mainland private enterprises vary, and at the same time querying whether the relevant listing threshold and regulatory mechanism, etc. are too lenient. In this connection, will the Government inform this Council:

(a) of the existing measures for regulating the mainland private enterprises listed in Hong Kong; whether it had in the past compiled statistics and conducted research in respect of the quality of corporate governance and about the situation of mainland private enterprises listed in Hong Kong encountering financial and auditing problems, etc.; if it had, of the findings; whether it has conducted investigation to understand the situation relating to the recent cases of mainland private enterprises involving in the aforesaid financial and auditing problems, etc.; if it has, of the reasons why they encountered such problems, and whether issues of violation of the Listing Rules, mismanagement, delays in the dissemination of information and having misled investors, etc. were involved; whether it knows if the Securities and Futures Commission of Hong Kong has followed up the relevant cases; and

(b) whether the authorities have assessed the impact of the successive cases of mainland private enterprises encountering problems on the stability and reputation of the financial market of Hong Kong; whether it will review if the current listing threshold, the sponsor regulatory regime, as well as the existing regulatory mechanism are too lenient, and appropriately tighten and enhance the mechanism, with a view to restoring the market's confidence in the local financial regulatory regime and the mainland private enterprises listed in Hong Kong?

Reply:

President,

My reply to the two parts of the question is as follows:

(a) All listing applicants and listed companies including Mainland private enterprises (MPEs) are subject to the regulation under the Securities and Futures Ordinance (SFO), and the Listing Rules of the Stock Exchange of Hong Kong Limited (the Exchange) as approved by the Securities and Futures Commission (SFC) under the SFO. All listing applicants including MPEs have to meet the listing eligibility requirements including those with regard to profits, market capitalisation and revenue. After listing, all listed issuers including MPEs have to comply with the continuing obligations with regard to disclosure, etc.

Under the Listing Rules, the Exchange ensures the operation of a fair and orderly market by requiring issuers to disclose all material information, have in place measures to safeguard their assets and have appropriate financial and reporting controls to ensure all material information is disclosed in a timely manner to the investing public. Matters relating to misappropriations, misleading disclosures and market misconduct are governed by Hong Kong laws, most notably the SFO. Where the Exchange becomes aware of circumstances suggesting violations of the law, it would make referrals to the appropriate law enforcement agencies including the SFC and the Police.

The Exchange defines MPEs as enterprises with origins of establishment in the Mainland, excluding H shares and red chips. Currently there are 415 MPEs listed on the Exchange.

In 2011, the listing of four MPEs was suspended by the Exchange in connection with accounting issues. Among these,

* two cases involved possible fraudulent transactions and the Exchange has required these issuers to appoint forensic accountants to investigate the matters. These cases may involve violations of the law and would be investigated by the appropriate law enforcement agencies;

* one case involved possible Listing Rules breaches and corporate governance issues including unreported connected transactions and pledges of company assets without proper approvals. The Exchange has required the appointment of a forensic accountant to investigate these issues; and

* one case involved insufficient information provided to auditors.

Up to April 12 this year, the Exchange suspended the listing of seven MPEs, four of which were listed within three years, because they were unable to release their financial results for the year ended December 31, 2011. Of these seven cases, three cases involve possible fraudulent activities and false account records, and four cases involve delays in the completion of audit work or the requirement for additional work done relating to particular material transactions of the issuers. The Exchange is continuing the investigation of these cases.

The SFC has commenced investigations or court proceedings in a number of cases in relation to suspected misconduct or breaches of the SFO involving newly listed Mainland companies. In accordance with normal practice, the SFC does not comment on specific cases under investigation.

(b) In 2010, the Exchange reviewed the Profit Test and all listing eligibility requirements and compared them to those adopted in other major markets. The review showed that the initial listing criteria of the Exchange were comparable, if not higher, than international standards.

To promote good corporate governance, the Exchange amended the Listing Rules and the Corporate Governance Code in January 2012. The new rules promote a stronger and independent board of directors governing listed companies, clarify the roles and responsibilities of directors, and require shareholders' participation in the appointment and removal of auditors.

Separately, the SFC conducted a review of the work of listing sponsors and issued a report on its findings in March 2011. It revealed certain deficiencies in the work of the sponsors and inadequacies in their internal systems and controls. The SFC is reviewing the existing requirements relating to the work of sponsors, with a view to putting forward improvement proposals for market consultation shortly.

To encourage a continuous disclosure culture among listed corporations, the Government introduced the Securities and Futures (Amendment) Bill 2011 (the Bill) in June 2011 to, inter alia, oblige listed corporations to disclose price sensitive information (PSI) in a timely manner and impose civil sanctions against non-disclosure of PSI. The Bill will resume Second Reading Debate on April 25, 2012. The statutory PSI regime will further enhance the transparency and quality of our market. It will also bring our regulatory regime more in line with those of other major markets and strengthen Hong Kong's position as a premier capital formation centre. Subject to passage of the Bill by the Legislative Council, our plan is to commence operation of the statutory PSI regime on January 1, 2013.

The Government will continue to work with the Exchange, the SFC and parties concerned to ensure the quality of listing on the Exchange.

Teatime specialist ready to dish up $1.56b offering
The Standard
Thursday, April 26, 2012

Local cha chan teng chain operator Tsui Wah Restaurant plans to float this year.

The popular chain, which has been dishing out its famous crispy bun and milk tea snack for the past 45 years, will seek to raise up to HK$1.56 billion from its initial public offering.

Founded in 1967 as a small street- side cafe in Mong Kok, Tsui Wah has expanded into a noted chain, a must-visit for many mainland tourists.

Eight of its 20 outlets in the territory are open around the clock. The chain also has two outlets in Shanghai.

A broker said Tsui Wah's offer is attractive, and its peers - listed Chinese fast-food restaurant chains - have been trading high recently.

Shares of Cafe de Coral (0341) and Fairwood (0052) have gained 18 percent and 31 percent, respectively, since the start of the year.

But spiraling rents are a big risk for Tsui Wah, the broker said, with seven of its outlets located in the popular and in-demand tourist districts of Central, Causeway Bay and Tsim Sha Tsui.

In other action, Haitong Securities starts trading tomorrow. But around 200,000 shares have already been traded by fund managers and institutional investors in the over-the-counter market. Each share was traded between HK$11.50 and HK$11.80 - higher than the offer price at HK$10.60.

Separately, China City Railway Transportation Technology Holdings plans to sell 200 million shares on the Growth Enterprise Market next month.

The company is mainly involved in design, implementation and maintenance of application solutions for centralizing functions of public transport systems in Beijing and Hong Kong.

It aims to raise as much as HK$246 million.

The retail book opens next Thursday, with trading debut expected on May 9.

Haitong shines in gray mart on debut eve
The Standard
Friday, April 27, 2012

Broking giant Haitong Securities starts trading on the main board today.

The Shanghai-based brokerage - the mainland's second-largest - raised HK$13 billion through an initial public offering. It was the the world's largest IPO so far this year, thanks to a group of cornerstone investors who subscribed to HK$4.5 billion worth of shares.

These investors will hold 4.47 percent of the total issued shares following Haitong's listing.

In the retail market, allotted only 5 percent of the float, the issue was oversubscribed 2.86 times. Each investor got one board lot of 400 shares.

The final listing price was set at HK$10.60 per share, or a price-to- earnings ratio of over 20 times - much higher than rival and China's largest brokerage CITIC Securities (6030), which traded at 11.85 times yesterday.

The gray market saw Haitong traded over the offer price. According to two local brokers, shares closed at HK$10.72 and HK$10.74, respectively.

Investors with one board lot of shares made a paper gain of at least HK$48.

A-shares closed at 10.02 yuan (HK$12.35) yesterday, up 16.5 percent over the H-share offer price.

Meanwhile, China Zhongsheng Resources Holdings (2623) also makes its trading debut today. The Shandong- based iron-ore miner priced each share at HK$1.23, raising HK$159.6 million.

Its international tranche was fully covered, while the retail portion was slightly oversubscribed.

But gray market transactions were weak, finishing at the offer price.

Separately, Yongda Auto had its listing hearing yesterday. The Shanghai- based auto dealer aims to raise HK$3.90 billion from its IPO.