Asia Share Sales Are Cheapest in China, Down Under
Asian shares are now cheap with regulatory changes and need to raise capital as coronavirus disrupts economies
(Bloomberg) -- Companies listed in China, Australia and New Zealand are offering the steepest discounts for follow-on share sales in Asia thanks to regulatory changes and the need to raise capital to weather the economic disruptions caused by the coronavirus.
In China, the average discount for additional offerings has been 19% from last close for deals priced since Jan. 20, when the market began its virus-induced slump. It was 16% for Australian companies and 22% for those in New Zealand.
Kathmandu Holdings Ltd. offered a massive 55% discount in its $17.7 million placement, data compiled by Bloomberg show. That compares with discounts in the single digits for other markets in the region.
Both China and Australia have had regulatory changes to make it easier to sell shares, leading to a surge in issuance in both countries. In Australia, companies are tapping the market to raise funds to ride out a lockdown that may last six months. With tourism being one of the hardest-hit sectors, online travel agency Webjet Ltd. offered a steep 38% discount when it announced a $70.1 million institutional placement.
Elsewhere in Asia, the average discounts have also increased, but not to the levels seen in China and Australia. In South Korea, the average discount offered in the four follow-on offerings since Jan. 20 has been 8.8%, followed by Hong Kong’s 7.9%.
Chinese companies account for almost half of the $24.9 billion in additional offerings priced since Jan. 20, while Australian firms are the next biggest cohort, with $6 billion worth of secondary stock sales. March was especially busy for Chinese companies, with 32 of them announcing follow-ons, the most since September 2016, data compiled by Bloomberg show.
| Market | Average discount to last close |
|---|---|
| New Zealand | 22% |
| China | 19% |
| Australia | 16% |
| South Korea | 8.8% |
| Hong Kong | 7.9% |
| Malaysia | 7.1% |
| India | 6.2% |
| Singapore | 6.2% |
| Japan | 1.8% |
| Average | 14% |
UPCOMING LISTINGS:
- Akeso Inc.
- Hong Kong stock exchange
- Size $333m
- Trading April 24
- Morgan Stanley, JPMorgan
- Kingsoft Cloud Holdings Ltd.
- Nasdaq exchange
- Size at least $300m
- Pre-marketing from April 17
- JPMorgan, UBS, Credit Suisse, CICC
- Beijing Bei Mo Gao Ke Friction Material Co.
- Shenzhen stock exchange
- Size $122m
- Listing date TBD
- Changjiang Securities
More ECM situations we are following:
- Sino Biopharmaceutical Ltd. shareholder and founder Tse Ping sold 200 million shares at HK$11.35 apiece, according to terms of the deal obtained by Bloomberg.
See also:
- Asia ECM Weekly Agenda
- IPO data
- U.S. ECM Watch
- EU ECM Watch
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