ASIA BRIEFING: HONG KONG has been the world's main destination for initial public offerings (IPOs) in the past few years but things have been pretty sluggish in recent months on the back of stock market volatility and the euro zone crisis.
Hong Kong was the world’s biggest IPO market in 2011 for the third year in a row, raising €197 billion thanks to firms queuing up to list in the city to take advantage of China’s explosive growth, but many have held off on listing until market direction becomes clearer.
As such, everyone was watching the trading debut of Chinese brokerage Haitong Securities, which raised €1.27 billion from a share sale in the world’s largest IPO so far this year. The fact that Haitong, China’s second biggest brokerage, fell on its trading debut won’t have eased jittery nerves much.
Those pushing Graff Diamonds, Shanghai Fosun Pharmaceutical, Inner Mongolia Yitai Coal and China Nonferrous Metal Mining Group will find it challenging to convince investors to get into such new listings.
Meanwhile, Hong Kong’s stock market regulator has hit Mega Capital, the underwriter of a listing in Chinese fabric maker Hontex International Holdings, with HK$42 million (€4.1 million) fine.
It said the group had failed to obtain important information from Hontex’s suppliers and customers and also failed to act independently and impartially.
The Securities and Futures Commission is said to be coming up with tough new rules and is expected to examine whether sponsors should be held liable for the contents of deal documents.
