Haier to test D-share model
Equities Chinese home appliance giant to launch Frankfurt float on MondayBY FIONA LAUChinese home appliance giant
QINGDAO HAIER is set to launch
a smaller-than-expected
Frankfurt D-share sale on
Monday amid market turmoil.
The company will sell 265m
D-shares in an indicative price
range of €1.00–€1.50 each to
raise up to €397.5m (US$461m),
according to an announcement
on Friday. There is a 15%
greenshoe which represents
39.75m D-shares.
The size of the offering is
smaller than what the company
had indicated. Haier said earlier
it had received approval from
regulators to sell up to 460m
shares (including the greenshoe
option) in the Frankfurt listing.
The proposed D-share
sale of the Shanghai-listed
company, the first of a new
class of equities for Chinesecompanies, has aroused decent
interest from international
investors. Bankers on the deal,
however, reckon the company
will have to sell the D-sharesat an attractive discount to
its A-share counters amid
challenging market conditions.
Similar to other follow-on
offerings, Haier is expected to
sell the D-shares at a discount
to its A-shares. Shenzhen-listedGanfeng Lithium, for instance,
sold H-shares at a discount of
55% to the company’s A-shares
last week in its HK$3.3bn
(US$421m) Hong Kong listing.“Haier is a good name so
investors are keen to have a
look at the offering. However,
given the global stock market
weakness, investors are
generally asking for a 20%
discount and some are evenlooking for around 30%,” said a
person close to the deal.
Market conditions have been
challenging amid escalating
trade tensions between China
and the US and higher US
interest rates. Asian stocks
tumbled last Thursday
following a sell-off in the US
market the previous day, with
the S&P 500 plunging 3.3% and
the Nasdaq Composite Index
down 4.1%.
Ganfeng, which started
trading in Hong Kong last
Thursday, saw its Hong Kong
shares plummet 29% below the
IPO price.
To attract investors in volatile
markets, Haier is now selling its
D-shares at a discount of 20%–
46% to its A-shares based on the
company’s close in Shanghai on
Thursday.
International investors who
have no access to the A-share
market are the main group of
investors showing interest in
Haier’s D-share offer, according
to another person close to the
deal.Thailand takes blockchain leap
Bonds Central bank to sell savings bonds using distributed ledger technology by end-BY KIT YIN BOEYThailand is leading the charge
in Asia to adopt blockchain
technology in its debt market,
which promises to speed up
bond settlement and delivery,
and cut costs.
The Bank of Thailand is
hammering out the details
on the final structure and
mechanisms of the distributed
ledger technology with market
participants including the
Public Debt Management
Office, the Thailand Securities
Depository (TS), the Thai Bond
Market Association (ThaiBMA)
and bank selling agents. It plans
to use the technology in the
sales of its popular government
savings bonds by the end of
2019.
The initiative is one of the
world’s first uses of DLT in
bond sales, according to aBOT statement. Elsewhere in
the region, the World Bank
in August sold a A$110m
(US$80.2m) 2.2% Kangaroo due
2020 that was the first legally
binding bond created, allocated,transferred and managed based
on blockchain.
“Overall, the project will
lead to greater efficiency,
transparency, security and
reduction in operating costs
across the entire value chain,”said BOT.
The central bank decided to
give the blockchain technology
its debut in the offering of
savings bonds as the retail
offerings involve the leastcomplex processes. There are
plans to eventually implement
the technology across the
government bond market.
A pilot project of the DLT
scripless bond scheme was
conducted earlier by theBOT, which found a number
of benefits. These included
shortening the time it takes
to transfer savings bonds to
investor accounts from 15 days
to just two days. The process
will also allow investors to
buy any amount of savings
bonds from any selling agent,
typically banks, and not be
constrained by the purchasing
limits currently enforced by
each bank.
The technology will also
streamline complex operational
processes faced by selling
agents, the TSD and the BOT
and allow issuers to monitor
and manage bond sales in real
time.
The ThaiBMA is also
studying the use of blockchain
technology for the corporate
bond market. Unlike
government bonds and savings
bonds, corporate bonds inNews
The central bank decided to give the blockchain
technology its debut in the offering of savings
bonds as the retail offerings involve the least
complex processes. There are plans to eventually
implement the technology across the government
bond market.“Haier is a good name so investors are keen to
have a look at the offering. However, given the
global stock market weakness, investors are
generally asking for a 20% discount and some are
even looking for around 30%.”