KWG Property to raise HK$1.37b from share sale
Updated: 2009-07-01 07:15
HONG KONG: KWG Property Holdings Ltd plans to sell 260 million new shares to raise as much as HK$1.37 billion ($177 million) in a Hong Kong initial public offering, according to an e-mail sent to investors.
The shares will be sold for between HK$5.05 and HK$5.25 apiece and the proceeds will be used for "further acquisition" of the company's land bank and general corporate purposes, it said.
In the first half of the year, 18 IPOs have been listed in Hong Kong with impressive market debuts.
Mainland scrap-metal recycler China Metal Recycling and furniture maker Hing Lee gained 22 percent and 39 percent respectively on their debuts.
China Metal Recycling slumped 3.67 percent to close at HK$6.53 yesterday while Hing Lee slid 7.69 percent, closing at HK$1.20.
The next IPO in the pipeline will be mainland shampoo maker Bawang International, due to start trading Friday.
PricewaterhouseCoopers (PwC) estimated the total amount raised from IPOs in Hong Kong for the first half of 2009 will be HK$17 billion, a year-on-year drop of 66 percent. PwC said IPO funds raised this year will likely reach HK$100 billion.
Edmond Chan, assurance partner of PwC Hong Kong, said an improvement in the second quarter this year has been seen with hopes of a recovery in the second half as money flows into the stock market.
It's still not the time to be "overly optimistic over the medium to long term" as the economic outlook held by investors remains uncertain, Benson Wong, assurance partner of PwC Hong Kong, warned.
Chan believes IPO activities will continue for the rest of this year. "IPO activities will continue in the second half if there are no significant negative economic indicators. This will create a favorable environment for large mainland Chinese enterprises to list in Hong Kong."
(HK Edition 07/01/2009 page4)