News
Chinese issuers rush out IPOs
Equities At least 16 companies looking to raise a combined US$15.4bn despite global sell-offBY FIONA LAUAt least 16 Chinese companies
are rushing out overseas IPOs in
July in a bid to raise a combined
US$15.4bn before market
conditions deteriorate further.
Fears of an intensified trade
war between China and the
US have quickened a sell-off in
global stock markets in recent
weeks. As of last Thursday, the
Dow Jones Industrial Average
had retreated 9% from its January
high and Hong Kong’s Hang
Seng Index dropped 15% from its
January peak.
Investors have turned
cautious amid worsening market
conditions, forcing issuers to
price their shares low, trim the
fundraising size or even pull the
floats.
Chinese smartphone maker
XIAOMI raised HK$37.1bn
(US$4.7bn) in the world’s
biggest tech float in four years,
after pricing it on Friday at
the bottom of the indicative
price range of HK$17–$22. The
final price values the company
at US$53.9bn pre-shoe orUS$54.3bn post-shoe.
The valuation is far below
the US$100bn touted by sources
earlier this year and below
the more recent floor price of
US$70bn that the company and
its advisers had informally used
as guidance for investors.
“The falling markets have
kept many high-quality long-only investors away from the
Xiaomi deal though we did see
some sizable orders from global
long-only funds on the last day
of bookbuilding. Many orders
also came in at a smaller-than-
expected size,” said a person
familiar with the situation.
Chinese online interior design
and construction companyQEEKA HOME postponed a Hong
Kong IPO of up to HK$2.18bn
last Wednesday, the day it was
supposed to price the float. On
the same day, UXIN , one of China’s
biggest used-car marketplaces,
slashed the size of its Nasdaq IPO
by more than half.
The company raised US$225m
through the sale of 25m primaryMalaysia CDS spikes 06 China’s dollar return 06 NDRC squeezes property bonds 08
Cambodia set for bond first
Bonds Microfinance provider eyes debut corporate issue with help of multilateral instutionsBY DANIEL STANTONCambodia is set to become
the next frontier market for
credit investors, as it prepares
to welcome its first corporate
bond later this year.
Multilateral institutions are
helping to bring the debut
deal to market and create a
new local currency funding
destination in the region,
before a fully fledged sovereign
bond market has developed in
Cambodia.
Microfinance provider HATTHA
KAKSEKAR (HKL), whose nametranslates as “a helping hand
for farmers”, plans to issue up
to US$20m-equivalent of bonds
denominated in Cambodian riel
later this year. Proceeds will
be used to support the growth
of its lending programme,
which served around 118,
borrowers as of December 31
2017.
HKL is a wholly owned
subsidiary of Thailand’s Bank
of Ayudhya, which is 76.88%
owned by Japan’s Mitsubishi
UFJ Financial Group.
The International Finance
Corporation, the private-sectordevelopment arm of the World
Bank Group, has proposed to
invest in the bond offering.
“The IFC investment in the
first KHR bond in Cambodia
is to help create a domestic
corporate bond market in
Cambodia and to support the
company in raising funding
to finance the growth of its
lending program to micro
borrowers including farmers
and women borrowers in the
rural areas,” the IFC wrote in a
disclosure.
Thailand’s Tris Rating in May
assigned HKL a BBB+ rating,noting that the company had
a strong market position and
good risk management systems,
but said that rules from the
central bank capping interest
rates on new microfinance
loans at 18% per annum would
constrain profitability for the
sector in the next few years.
In August 2017, Cambodia
passed an official declaration,
or prakas, enabling companies
to issue debt securities, and
followed this with rules to
allow bonds to be listed on
the Cambodia Stock Exchange
(CSX). Bonds can be issued in
Cambodian riel or US dollars,
and can be senior unsecured,
secured or guaranteed. It
also set out rules for its own
domestic credit rating agencies.