Initial public offerings in Hong Kong are set to roar back next week with the launch of two multi-billion dollar deals.
Fresh off the back of Chinese online gaming company NetEase Inc.’s second listing in Hong Kong, which has raised $2.7 billion in what is the world’s third-biggest initial share sale this year, e-commerce company JD.com Inc. is set to start taking orders on Friday evening for its own share sale in the city which could raise at least $2 billion, people familiar with the matter said.
In addition, China Bohai Bank Co., a mid-sized lender part-owned by Standard Chartered Plc, is also planning to launch an IPO in Hong Kong next week that could raise $2 billion, IFR reported. With Bohai Bank and JD looking to raise at least $4 billion combined, next week’s deal value is likely to exceed the total IPO haul for 2020 in the financial hub, which currently stands at $3.47 billion, excluding NetEase.
It is a sudden lurch back to life for what was last year’s busiest listing venue in the world, with over $40 billion raised. The activity coincides with a resurgence of IPO deals in the U.S. as well, where three companies raised more than $1 billion on Thursday alone. With the spread of the coronavirus outbreak from January onwards, IPOs slowed to a trickle earlier in the year as market slumps and volatility caused issuers to stay on the sidelines.
The ongoing market rebound will likely prompt the pent-up supply of issuance. Asian stocks are poised to cap a second straight week of gains and Hong Kong’s Hang Seng Index this week bounced back to levels seen before China’s shock move to crack down on dissent in the city.
Two health-care companies, Hygeia Healthcare Holdings and Kangji Medical Holdings, are also set to start gauging investor demand for their Hong Kong IPOs next week, IFR has reported. Biotech and health care have been among the few sectors to hold up in terms of IPOs, accounting for most of Hong Kong’s largest deals this year — prior to NetEase — and drawing strong investor demand.
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