Hong Kong IPOs Are Happening at Fastest Pace in 18 Months

Zhen Hao Toh

18 Jan 2020, 02:42 AM IST

(Bloomberg) --

Bankers in Hong Kong have had a busy week as initial public offerings are taking place at the fastest pace in the city in almost two years.

Seventeen companies began trading this week, making it the busiest week for Hong Kong since July 2018, according to data compiled by Bloomberg. At the same time, companies already listed on the bourse were also seeking fresh funds and large shareholders were selling their stakes, causing a spike in the number of blocks and placements happening in the market.

The up-tick in deals is fueled by the rise in the Hang Seng Index, which is on its seventh consecutive weekly gain, its longest winning streak in two years. The flurry of activity is also driven by companies and banks wanting to get deals done before the market winds down for the earlier-than-usual Chinese Lunar New Year holidays.

Hong Kong IPOs Are Happening at Fastest Pace in 18 Months

However, a busy week may not be all good news. The 17 firms that debuted this week are trading with mixed results. Thirteen firms are currently trading underwater, data compiled by Bloomberg show. Chinese eatery chain Jiumaojiu International Holdings Ltd. and Wan Ho Holdings Group Ltd., which provides building maintenance services in Hong Kong, are two of the best performers. The worst debut is by Chinese floor tiles supplier JiaChen Holding Group Ltd., which slumped 33% below its offer price.

The disappointing performance of recent IPOs may not bode well for companies seeking listings on the bourse this year. In addition, over the past two years, a peak in the market index coupled with a jump in placements has been followed by a slide in global equities. A busy week may not be such a boon after all.

UPCOMING LISTINGS:

Central Retail Corp
- Thailand stock exchange
- Size up to $2.6b
- Books close Feb. 3, listing Feb. 20
- Bualang Securities, Phatra Securities, Credit Suisse, Morgan Stanley, UBS
Shenzhen Leoking Environmental Group
- Hong Kong exchange
- Pre-marketing started Dec. 18
- CLSA sole sponsor
Mr D.I.Y Group
- Bursa Malaysia
- Size up to $500m
- Pricing date TBD
- CIMB, Maybank
UCloud Technology Co Ltd
- Shanghai exchange
- Size $290m
- Listing Jan 20.
- CICC
Zhongguancun Science-Tech Leasing Co Ltd
- Hong Kong exchange
- Size up to $73m
- Listing Jan 21.
- Bocom International

More ECM situations we are following:

Tokopedia plans to do an IPO within the next three years, with a dual listing in U.S and Indonesia, Nikkei reports, citing an interview with the company’s president.
Ant financial is said to be working with banks to revive plans for an IPO, FT reported, citing people familiar with the matter.
Chinese data center operator ChinData Group is said to have selected banks working on its planned initial public offering, according to people familiar with the matter.