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These Brokerage IPOs Signal China’s Market Reform

These Brokerage IPOs Signal China’s Market Reform

(Bloomberg) -- Nanhua Futures Co. and Ruida Futures Co. are set to become the first futures brokerages listed in mainland China, as regulators ease trading curbs in a drive to revive the market segment.

Retail investors placed orders for more than 1,800 times the shares available to them in Nanhua’s initial public offering in Shanghai, the Hangzhou-based company said in a filing today. The operator of financial and commodity futures trading has raised $53 million selling shares at about 23 times earnings. A listing date has yet to be announced.

Xiamen-based Ruida is scheduled to take orders next week for a Shenzhen offering. Citic Seurities Co. is the sponsor for both IPOs.

Besides the two firms, Hong Kong-listed Holly Futures Co. is seeking regulatory approval for an A-share offering in Shenzhen, according to filings. China Merchants Securities Co. is sponsoring the deal.

China is mulling an overhaul of its futures market to boost trading and give global investors greater access. Proposed changes would remove a ban on unhedged bearish bets and allow foreigners to trade without a government-approved quota, people familiar with the matter said this month.

Regulators have been easing futures trading curbs introduced during the country’s 2015 stock market crash, such as the maximum number of contracts that each investor can open. Looser restrictions would help revive a market segment that was paralyzed during a haphazard crackdown in 2015.

Nanhua’s net revenue surged 126% to 4.6 billion yuan in 2018, its prospectus shows. The firm posted net revenue of 3.8 billion yuan in the first six months.

UPCOMING LISTINGS:

  • Telefast Indonesia (provider of enterprise software solutions)
    • Kresna Sekuritas and Trimegah Sekuritas
    • Expected offering period Sept. 9-11
    • Expected listing Sept. 16
  • AllHome (home-furnishing retailer)
    • Size about $230m
    • Approved by Philippines exchange Aug. 19
    • Owned by billionaire Manuel Villar
  • CGN Power A-shares (nuclear power producer)
    • Shenzhen exchange
    • Raised $1.9b; listing date TBA
    • CICC
  • Beijing ABT Networks (maker of security products)
    • Shanghai Star market
    • Expected pricing Aug. 26
    • Expected to take orders Aug. 28
    • Tianfeng Securities
  • Bear Electric Appliance (maker of household electrical appliances)
    • Offer size $161m
    • Shenzhen exchange
    • Took orders Aug. 14; listing date Aug. 23
    • Dongguan Securities

More ECM situations we are following:

  • SoftBank’s brokerage unit plans to allow individuals in Japan to participate in initial public offerings with as little as a 1,000 yen note
  • Ximalaya FM hired JP Morgan, Morgan Stanley and Goldman Sachs to manage IPO of up to $1b: IFR Asia
  • Steadfast Group raised approximately A$100 million through placement: IF
  • SF Holding and New Hope Liuhe to attend China regulatory hearing Aug. 23 to seek approval for proposed convertible bond offers of combined 9.8b yuan: IFR Asia
  • The China Securities Regulatory Commission starts to review 2.8b yuan private placement plan of Shanghai-listed CECEP Wind-Power: IFR Asia
  • Powerlong Commercial Management, unit of Powerlong Real Estate, has appointed ABCI Capital as sole sponsor for proposed Hong Kong IPO
  • Medco Energi is mulling IPO for Medco Power Indonesia and Amman Mineral
  • SBI Cards and Payment Services sent out requests for proposals to investment banks and lawyers about roles in its proposed IPO: Mint

SEE ALSO

  • Asia ECM Weekly Agenda
  • IPO data
  • U.S. ECM Watch
  • EU ECM Watch
  • To receive the ECM Watch in your inbox daily, click the “subscribe” button at the top of this article

To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Tom Redmond

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