Sinopharm, China's biggest pharmaceuticals distributor, and Metallurgical Corp, one of its biggest engineering groups, have raised a combined $3.5bn in initial public offerings in Hong Kong.
The sales, which collected more than the total value of Hong Kong IPOs in the first half of the year, come as a wave of Chinese companies seek to offer new shares in the territory.
In the past three months, 13 companies have priced IPOs in Hong Kong, while 23 companies have announced their intentions to do so in the coming months.
Most of those have been mainland Chinese companies looking to take advantage of buoyant stock markets to raise funds for expansion. Dozens of mainland companies mothballed IPO plans last year when markets plunged.
While some analysts say the wave of IPOs will have little effect on the Hong Kong stock market, others argue that it will inevitably drag prices lower as the glut of new shares diverts money from existing stocks.
"When issuance picks up, it is one of the classic signs that the market has reached a top," said the chief investment officer of a private bank.
In Hong Kong's biggest IPO this year, Metallurgical yesterday sold HK$18.2bn ($2.3bn) of stock, people familiar with the deal said, following its listing in Shanghai last week, which raised Rmb18.97bn ($2.78bn).
Sinopharm raised HK$8.73bn in a deal that was priced late on Wednesday. The company has attracted plenty of investor attention because China, the world's third-largest economy, plans to spend Rmb850bn improving its healthcare system in the next three years.
Sinopharm priced its offering at HK$16 per share, at the very top of a price range from HK$12.25 to HK$16. The retail and institutional tranches were more than 500 times and 40 times subscribed respectively. An over-allotment option to issue additional shares represented 15 per cent of the offering.
Metallurgical fetched HK$6.35 per share, towards the lower end of a HK$6.16 to HK$6.81 range. Its institutional tranche was more than 10 times subscribed, while the retail tranche was covered more than 200 times.
Sinopharm's and Metallurgical's Hong Kong Listings Raise $3.5B
By Robert Cookson(The Finacial News)Updated:2009-9-18 Print
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