Hong Kong Block Trade Bonanza Raises $1.8 Billion In One Day

Issuers took advantage of Asian stocks hitting fresh records on Monday to sell $1.8 billion worth of stock in five block trades which were all increased in size, a new year frenzy highlighting bullish sentiment in the market.

The flurry of share sales came in a narrow window before the Georgia Senate runoffs in the U.S. on Jan. 5, which could prolong the uncertainty from the presidential election of 2020. Indeed, in a sign of volatile markets U.S. stocks slipped on Monday as investors fretted about the country’s nascent economic recovery following a surge in global coronavirus cases.

The parent of Chinese pharmaceutical firm Wuxi Biologics Cayman Inc., a familiar presence in Hong Kong’s equity capital markets, raised $1.3 billion in a placement, selling 20 million additional shares in the biotech company. Warburg Pincus fetched $188 million from the sale of mainland vitro fertilization service provider Jinxin Fertility Group Ltd. shares, which was also upsized.

“Definitely lots of bullish sentiment swiveling in the market right now, particularly when it comes to the Chinese market with the interest to hunt for returns at the start of the year,” said Jingyi Pan, market strategist at IG Asia Pte.

Shareholders sold stakes on Monday in three other companies in Hong Kong: Hygeia Healthcare Holdings Co, China East Education Holdings and Kingboard Laminates Holdings Ltd.

Tuesday’s runoff in Georgia will determine whether Democrats have control of Congress and so can push President-elect Joe Biden’s agenda. But much like the November election, the results are likely to be delayed for days or even weeks. Deal activity slowed during the U.S. election last year, showing investors hold off big bets during key political events.

Apart from buoyant markets, the short window before the holidays is also spurring the boom in share sales. January is often a busy time for additional equity sales in Hong Kong, as the upcoming Lunar New Year holiday tends to make the period too short to carry out initial public offerings.

©2021 Bloomberg L.P.

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