Banks Are at Forefront of Australia’s Share-Sale Boom

Fox Hu

28 Nov 2019, 02:13 AM IST

(Bloomberg) -- Australian banks are topping up share sales in a rush to bolster their capital, lifting additional offerings in the nation to their highest level in four years.

Companies and shareholders have raised $16 billion through additional offerings this year, the highest since 2015, according to data compiled by Bloomberg. With a few weeks to go before year end, another $800 million of proceeds would bring the 2019 tally to a 10-year high.

Bank of Queensland Ltd. raised $171 million this week, selling shares at the top of a marketed range. The sale was intended to strengthen the lender’s balance sheet, with an expected boost of 88 basis points for its Level 2 CET1 capital ratio.

Westpac Banking Corp. sold $1.4 billion of shares earlier this month, as the lender sought to increase its buffer above the regulatory capital ratio benchmark. It was the country’s biggest share sale this year.

Yet Westpac’s sale may not be enough, analysts say. The lender may need to raise more funds to pay for a possible A$1 billion ($678 million) fine that stems from allegations of money-laundering law violations, they say.

Earlier this year, National Australia Bank Ltd. and Macquarie Group Ltd. each raised A$1 billion selling shares.

Dragged down by banks, the S&P/ASX 200 Finance Index has dropped 5.6% this quarter as the worst performer among sub-gauges of Australia’s benchmark. Finance is also the weakest sector on a year-to-date basis.

Despite booming additional sales, Australia’s total IPO value is heading for a six-year low after a spate of pulled deals. Initial offerings have raised $4.1 billion this year, down by a third from the same period in 2018, data compiled by Bloomberg show.

UPCOMING LISTINGS:

Postal Savings Bank of China
- Shanghai exchange
- Size $4.1b
- Taking orders Nov. 28; listing date TBA
- Citic Securities, CICC, China Post Securities, UBS Securities
Pharmaron Beijing
- Hong Kong exchange
- Size $589m
- Listing Nov. 28
- CLSA, Goldman Sachs, Orient Capital
Venus MedTech
- Hong Kong exchange
- Size up to $331m
- Taking orders from Nov. 26; listing Dec. 10
- Goldman Sachs, CICC, Credit Suisse, China Merchants Securities
China Merchants Commercial REIT
- Hong Kong exchange
- Size up to $400m
- Taking orders from Nov. 28; listing date TBA
- Citigroup
Alphamab Oncology
- Hong Kong exchange
- Size $200m-$300m
- Taking orders from Nov. 28
- Morgan Stanley, Jefferies, CLSA
Bangkok Commercial Asset Management
- Thailand stock exchange
- Size up to $887m
- Taking orders from Nov. 25; listing date TBA
- Trinity Securities, Kasikorn Securities, UBS

More ECM situations we are following:

Nongfu Spring Co., one of China’s biggest bottled water and beverage companies, is said to consider a Hong Kong IPO that could raise at least $1 billion
Malaysian operator U Mobile is said to plan seeking about $500m in IPO in Kuala Lumpur
Alphamab Oncology, a Chinese biopharmaceutical company, plans to start taking orders Thursday for a Hong Kong IPO that could raise as much as $300m
Pharmaron Beijing’s initial retail portion was 114x covered in Hong Kong share sale: filing
China Zheshang Bank drops below offer price in Shanghai Wednesday, a day after $1.9b listing