With JD Listing, China Banks Set to Displace Western Rivals in League Table

(Bloomberg) -- JD.com Inc.’s $3.9 billion Hong Kong listing is set to give several Chinese banks a boost in league table rankings, displacing from the top 10 some of their international peers that usually dominate in equity capital markets transactions .

After accounting for the share sale, which is the world’s second-biggest this year, UBS Group AG will be the only western bank in the top 10, according to Bloomberg League Tables for Hong Kong IPOs. The Swiss lender was one of the sponsors for JD’s listing together with Bank of America Corp. and CLSA Ltd. Sponsors do most of the work for a deal and take home the lion’s share of the fee pool, but league table credit is split equally among all banks.

Chinese banks have been expanding their market share in recent years, squeezing fees and putting pressure on their western rivals. The number of deals they work on means they have come to lead the league tables.

The top spot for Hong Kong IPOs has been held by a Chinese bank for the last four years, although five of the top 10 were international last year. Large offerings such as Budweiser Brewing Co APAC Ltd.’s $5.75 billion IPO and Alibaba Group Holdings Ltd.’s $13 billion Hong Kong listing gave a big boost to the banks that worked on those deals, including Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co. and Credit Suisse Group AG.

Prior to JD’s offering, there were three international banks in the top 10 this year: UBS, Citigroup and JPMorgan. However, the latter two have been replaced by Guotai Junan Securities Co. and Haitong Securities Co., both of which were bookrunners on JD’s share sale. China International Capital Corp., which has worked on high-profile listings such as those by Alibaba and NetEase Inc. and last year was No. 1, will slip by six spots because of the JD effect.

To be sure, with half the year still to go and a lot of deals in the pipeline, the rankings are still subject to change. As demonstrated by JD, Alibaba and Budweiser, one large deal can make a big difference to the league tables.

UPCOMING LISTINGS:

• JD.com Inc.
  • Hong Kong exchange
  • Size $3.9b
  • Listing June 18
  • Bank of America, UBS, CLSA
• China Bohai Bank
  • Hong Kong exchange
  • Size about $2b
  • Pre-marketing from June 22
  • CCBI, Haitong, ABC International, CLSA
• SK Biopharmaceuticals
  • Korea stock exchange
  • Size up to $805m
  • Pricing June 19, listing around July 2
  • NH Investment & Securities, Citi, Morgan Stanley
• Hygeia Healthcare Holdings Co.
  • Hong Kong exchange
  • Pre-marketing from June 8
  • Morgan Stanley, Haitong
• Kangji Medical Holdings Ltd.
  • Hong Kong exchange
  • Pre-marketing from June 8
  • Goldman Sachs, Citic Securities, Bank of America
• Smoore International Holdings
  • Hong Kong exchange
  • Size at least $800m
  • Pre-marketing could start next week
  • CLSA
• Burning Rock Biotech Ltd.
  • Nasdaq
  • Size up to $209m
  • Pricing June 11 U.S. time
  • Morgan Stanley, BofA, Cowen & Co., CMBI, Tiger Brokers

More ECM situations we are following:

• China’s No. 2 online retailer JD.com Inc. raised HK$30.1 billion ($3.9 billion) in its Hong Kong share sale, people familiar with the matter said, cementing the world’s second-biggest listing this year
• Chinese electric-vehicle maker NIO Inc. has raised $428 million after selling 20% more shares than initially planned at $5.95 each, according to people familiar with the matter
• NetEase Inc. soared more than 9% at the start of its first day of trading in Hong Kong, a solid debut that bodes well for a growing line-up of Chinese tech giants seeking to list closer to home
• Belle International raised $375 million after selling a stake in Topsports International

See also:

• Asia ECM Weekly Agenda
• IPO data
• U.S. ECM Watch
• EU ECM Watch
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