Market rally spurs wave of new IPOs
Updated: 2009-06-02 07:12
By Liu Yiyu(HK Edition)
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HONG KONG: Several energy and resources companies plan to sell shares on the Hong Kong stock market in an apparent bid to take advantage of the continuing rally in the local bourse fuelled by optimistic investor sentiment.
Analysts said the growing optimism is being fuelled by anticipation of recovery on the mainland following yesterday's release of positive manufacturing data and hopes of a bottoming out later this year of the global economy.
Mainland chemical producer Lumena Resources Corp yesterday launched its initial public offering (IPO) in Hong Kong in a bid to raise up to $190 million. Lumena is selling 577.2 million shares at a range of HK$1.72 to HK$2.56 apiece, putting the company's valuation at 5.3 to 7.8 times its 2009 earnings forecast. The company said about 70 percent of the shares to be offered for sale are new issues.
If Lumena is able to price its IPO at the high end of the indicative price range, that would make its shares offering the second largest in Hong Kong to date, after the $1.3 billion IPO last month by Liaoning-based aluminum extrusion producer Zhong Wang.
Aside from Lumena and Zhong Wang, two Canada-based resources firms, including a firm controlled by tycoon Li Ka-shing's family, are also expected to seek a secondary listing in Hong Kong.
IPO issuance in Hong Kong has plunged as much as 72 percent so far this year, according to Thomson Reuters, while the benchmark Hang Seng Index (HSI) has surged by 65 percent since a March nadir, reviving listings that were put on hold since the financial meltdown last year.
Yesterday, the HSI surged 4 percent to 18,888.59 in an across-the-board rally, its highest close since Sept 25 last year, fuelled mainly by stronger-than-expected manufacturing data which raised hopes that the mainland's economy is on the road to recovery.
Sichuan-based Lumena is a major producer of thenardite, a solid form of sodium sulphate and an important raw material for the production of powdered detergents, dyes, textiles, glass, kraft pulp and pharmaceutical products.
Its trading debut is set on June 16, with Credit Suisse, Macquarie and BOCI as handling banks.
As Lumena's IPO gets underway, the market is awaiting further news about other upcoming IPOs.
Toronto-listed Husky Energy Inc, currently controlled by Li Ka-shing's family, plans to seek a secondary listing for its Asian assets in Hong Kong next year.
It plans to raise as much as $1 billion, but its plan has yet to be finalized by its parent company Hutchison Whampoa, one of Li's flagship companies.
Husky Energy CEO John Lau said in April that the company considered spinning off its Southeast Asian assets, including the Liwan gas field-southeast of Hong Kong, into a separate company to increase share values once it saw economic stability.
Separately, Canada-listed mining group SouthGobi Energy Resources is preparing to launch its IPO in the city over the next several months. The company aims to raise $200 million to $250 million.
SouthGobi, which currently owns mines in Mongolia and sells coal to mainland buyers, is seeking funds to expand its operations in Asia.
(HK Edition 06/02/2009 page4)