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27-07-2018, 07:31 PM
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China Tower’s IPO gets cool retail response as trade tensions and unstable markets keep investors cautious
Brokers say only about 21 per cent of the retail offer has been taken up, although the international portion has had more success
Laura He
PUBLISHED : Thursday, 26 July, 2018, 10:15pm
UPDATED : Thursday, 26 July, 2018, 11:11pm
China Tower, the world’s biggest telecoms transmission tower operator, saw a lacklustre response from retail investors on the second day of its US$8.7 billion Hong Kong IPO, as many potential buyers took a cautious approach in the face of market volatility and global trade tensions.
Anecdotal evidence from seven of Hong Kong’s main stockbrokers showed retail investors had subscribed to around HK$720 million (US$91.7 million) worth of shares, only about 21 per cent of the amount available.
“This is a huge IPO, coming at a time when the stock market is volatile,” said Alvin Cheung, associate director at Prudential Brokerage.
“It’s a Chinese state-owned giant with stable earnings, and has promised a 50 per cent dividend payout ratio. I don’t think Hong Kong investors are worrying about whether it’s a risky business.
“But the overall market is weak as the US and China are in a tense trade battle. Investors have become defensive or have set tighter budgets for IPO subscriptions. I think many are holding off their decisions until the last day [of the public offering].”
The portion of China Tower’s offer for international placement has been oversubscribed, however. Analysts have attributed that to the fact that the company is state-owned and has stable revenues, which would appeal to passive investment funds.
China Tower offered 43.114 billion shares at a range of HK$1.28 to HK$1.56 each, aiming to raise as much as HK$68.1 billion, the largest IPO in the world in nearly four years. Of the offer, 5 per cent was for retail investors, with the rest in the international placement tranche mainly targeting institutional investors.
The company started taking orders from institutional investors on Monday and launched the offer on Wednesday. The stock is expected to debut on August 8.
More details in https://www.scmp.com/business/companies/...nsions-and
Brokers say only about 21 per cent of the retail offer has been taken up, although the international portion has had more success
Laura He
PUBLISHED : Thursday, 26 July, 2018, 10:15pm
UPDATED : Thursday, 26 July, 2018, 11:11pm
China Tower, the world’s biggest telecoms transmission tower operator, saw a lacklustre response from retail investors on the second day of its US$8.7 billion Hong Kong IPO, as many potential buyers took a cautious approach in the face of market volatility and global trade tensions.
Anecdotal evidence from seven of Hong Kong’s main stockbrokers showed retail investors had subscribed to around HK$720 million (US$91.7 million) worth of shares, only about 21 per cent of the amount available.
“This is a huge IPO, coming at a time when the stock market is volatile,” said Alvin Cheung, associate director at Prudential Brokerage.
“It’s a Chinese state-owned giant with stable earnings, and has promised a 50 per cent dividend payout ratio. I don’t think Hong Kong investors are worrying about whether it’s a risky business.
“But the overall market is weak as the US and China are in a tense trade battle. Investors have become defensive or have set tighter budgets for IPO subscriptions. I think many are holding off their decisions until the last day [of the public offering].”
The portion of China Tower’s offer for international placement has been oversubscribed, however. Analysts have attributed that to the fact that the company is state-owned and has stable revenues, which would appeal to passive investment funds.
China Tower offered 43.114 billion shares at a range of HK$1.28 to HK$1.56 each, aiming to raise as much as HK$68.1 billion, the largest IPO in the world in nearly four years. Of the offer, 5 per cent was for retail investors, with the rest in the international placement tranche mainly targeting institutional investors.
The company started taking orders from institutional investors on Monday and launched the offer on Wednesday. The stock is expected to debut on August 8.
More details in https://www.scmp.com/business/companies/...nsions-and
Specuvestor: Asset - Business - Structure.
