HongKong IPOs get away with a protest discount
[HONG KONG] Hong Kong's IPO market is opening up again. Warehouse operator ESR Cayman last week pulled off a revamped US$1 billion-plus offering. E-commerce giant Alibaba's secondary listing plans are back on track too. But after months of anti-government protests, the investor welcome is tepid, and may be reserved for bluechip sellers.
Five months of clashes between demonstrators and police across the Chinese-run territory have left the economy battered, and bruised its equity market too. ESR and giant brewer AB InBev's Asian arm were forced to scrap listing plans over the hot summer months, after rattled fund managers baulked. Alibaba also put its Hong Kong plans on hold.
Now, though violent confrontations on the street have not subsided, the benchmark Hang Seng index has recovered to where it was before mass demonstrations began, in part because of optimism around a US-China trade deal. ESR relaunched its IPO last month, with support from Canadian pension fund OMERS and some healthy first-half earnings. Budweiser APAC pushed through an overhauled US$5 billion IPO in September. Neither has outshone the wider market since.
But even a lukewarm reception won't be for everyone. ESR and Budweiser APAC are heavyweights in their fields: a giant operator for warehouses used by e-commerce companies across the region, and the continent's biggest brewer. Topsports, another debutant that secured US$1 billion last month, is number one in China's booming sportswear market. All three have managed to price at a premium to peers.
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