Alibaba’s $11 Billion Listing to Propel Hong Kong to Regain Top IPO Spot

Julia Cristina Silvi Fioretti

20 Nov 2019, 03:31 PM IST

(Bloomberg) -- Alibaba Group Holding Ltd.’s $11 billion Hong Kong listing is set to propel the financial hub to the top spot globally in terms of fundraising from first-time share sales.

The offering by the e-commerce giant is a huge boon for Hong Kong, which has been rocked by increasingly violent anti-government protests and earlier this year lagged rival New York exchanges in new listings.

Companies have raised $22.6 billion from new offerings on Hong Kong’s stock market this year, data compiled by Bloomberg show. Alibaba’s listing is set to push that to about $33.8 billion, just ahead of the $33.5 billion raised by companies listing on the Nasdaq. Companies have raised $31 billion so far on the New York Stock Exchange.

Alibaba’s $11 Billion Listing to Propel Hong Kong to Regain Top IPO Spot

Hong Kong held the top spot last year thanks to a number of multibillion dollar IPOs but dropped to fourth place earlier this year as offerings dwindled. It has been No. 1 for three of the past five years: in 2018, 2016 and 2015.

After a summer drought marked by Anheuser-Busch InBev NV’s failure to pull off a $9.8 billion IPO of its Asian unit, Hong Kong managed a rebound in the autumn, topping all other exchanges for first-time share sales over September and October.

Why Now, and Why Hong Kong, for Alibaba’s Share Sale?: QuickTake

Alibaba’s smooth sailing in its share sale so far is proof that Hong Kong remains a viable fundraising venue despite raging protests that have forced the cancellation of multiple events and a U.S.-China trade war that has roiled markets.

Still, 2019 is far from over and New York’s markets could still stage a comeback given Hong Kong’s razor-thin lead. And Alibaba’s successful listing does not mean the door is open for everyone. On Monday South African gold mining company Heaven-Sent Gold Group Co. had to shelve its Hong Kong IPO because of “market conditions”.

“This deal transcends temporary fluctuations in the capital markets,” said Stephen Peepels, a partner a partner at law firm Hogan Lovells who focuses on equity capital markets. “Compared to smaller, lesser known IPOs, it’s less likely to be impacted by market conditions and the current political environment. Alibaba is ‘the’ Chinese company, like Amazon is ‘the’ U.S. company.”

UPCOMING LISTINGS:

Alibaba Group Holding
- Hong Kong exchange
- Size about $11b
- Pricing Nov. 20; listing Nov. 26
- Credit Suisse, CICC
Postal Savings Bank of China
- Shanghai exchange
- Size $4.1b
- Taking orders Nov. 28
- Citic Securities, CICC, China Post Securities, UBS Securities
China Zheshang Bank
- Shanghai exchange
- Size $1.9b
- Took orders Nov. 14; listing date TBA
- Citic Securities
Pharmaron Beijing
- Hong Kong exchange
- Size up to $588m
- Pricing Nov. 21; Listing Nov. 28
- CLSA, Goldman Sachs, Orient Capital
Venus Medtech
- Hong Kong exchange
- Size up to $400m
- PDIE Nov. 11-22
- Goldman Sachs, CICC, Credit Suisse, China Merchants Securities
China Merchants Commercial Reit
- Hong Kong exchange
- Size about $400m
- Started gauging demand Nov. 14; listing date TBA
- Citigroup
Canaan
- Nasdaq
- Size $110m
- Pricing Nov. 20
- Citigroup, China Renaissance, CMBI, Galaxy Digital, Huatai Securities, Tiger Brokers, Haitong International
Bangkok Commercial Asset Management
- Thailand stock exchange
- Size up to $1.16b
- Listing date TBA
- Trinity Securities, Kasikorn Securities
Longyan Zhuoyue New Energy
- Shanghai Star board
- Size $191m
- Took orders Nov. 11; listing date TBA
- Yingda Securities

More ECM situations we are following:

Wall Street banks working on Saudi Aramco’s share sale are set to lose out on a highly-anticipated fee windfall after the deal was pared back from a record global offering to a mainly domestic affair.
SDIC Power Holdings is considering proceeding with an offering of global depositary receipts representing A shares of the company, according to a statement.
An investor in the sports unit of Chinese billionaire Wang Jianlin’s real-estate-to-entertainment group is leading a lawsuit against the company, alleging Wanda Sports Group Co. and its bankers disseminated false and misleading statements related to a July initial public offering.
Yeahka Ltd., a Chinese payment technology services provider, is planning to raise about $300 million in an initial public offering in Hong Kong, according to people with knowledge of the matter.