Hong Kong To Launch First RMB IPO
Wednesday, April 13, 2011
A listing on the Hong Kong Stock Exchange (HKEx) by Hui Xian Real Estate Investment
Trust (REIT) could be the first initial public offering (IPO) denominated in
renminbi (RMB) outside of mainland China.
It was reported that the IPO by Hui Xian REIT, part of the Cheung Kong Holdings
group controlled by Li Ka-Shing, will have raised up to RMB12bn (USD1.8bn) for
some 40% of the trust when it closes on April 19. Listing on the HKEx is expected
to occur on April 29.
It is also expected that 80% of the IPO will be reserved by institutional investors,
while the remaining 20% will be subscribed by retail investors in Hong Kong. The Hui Xian REIT's main asset is the Beijing Oriental Plaza, a huge residential and commercial development in the Chinese capital which generated more than RMB1.7bn in revenue in the ten months to October 31, 2010.
The listing, which could set a benchmark for RMB IPOs in Hong Kong, is looking
to benefit from the large demand for investment products in that currency, arising
out of increasing RMB deposits being held in Hong Kong. At present, only RMB-denominated
bonds, called ‘dim sum bonds,’ which are issued by international
companies and yield low returns, are available to satisfy that demand.
Last month, the Secretary for Financial Services and the Treasury, Professor
K C Chan, said that Hong Kong remains the “testing ground for new products
and new ideas for China”. He then expected that there would be further
placements and offerings in Hong Kong, which would contribute to “a much
more interesting and diversified investment product market in Hong Kong”. |
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