Sat, Mar 19, 2011 - Page 10 News List

Japan crisis hits SE Asia’s biggest IPO


Shares in the China port unit of Hong Kong giant Hutchison Whampoa (和記黃埔) fell more than 3 percent on their debut in Singapore yesterday, hurt by the ongoing nuclear crisis in Japan.

The initial public offering for Hutchison Port Holdings Trust (和記港口控股信托), which controls deepwater ports in China and Hong Kong, has raised US$5.5 billion, making it Southeast Asia’s biggest and the world’s largest so far this year.

However, analysts warned that its first trading session could be hurt by the ongoing nuclear crisis in Japan, which has dented investor sentiment globally.

The company opened at US$0.975 a share on the Singapore Exchange (SGX) at 6am GMT, down from its initial public offering (IPO) price of US$1.01.

Financial group CIMB warned in a note to clients that the firm could be hit, as Japan is a major source of equipment.

“Japan is the major key components exporter in several fields, including electronics, optic media and machinery to manufacturing countries in the region,” it said. “Near-term supply chain disruptions could have a negative -impact on trade volumes. This could hurt [Hutchison Port’s] near-term earnings.”

And Ng Kian Teck, an investment analyst with SIAS Research in Singapore, told reporters: “I think it is fortunate they got the IPO funds raised before the Japan crisis. The price will probably trade lower than the IPO price.”

However, company executives were upbeat.

Canning Fok (霍建寧), chairman of the trustee manager of Hutchison Port Holdings Trust, told reporters at the listing ceremony: “Well, I think, consider [sic] the situation, this is excellent.”

“This is the best port you can find anywhere in the world ... I am very positive about the whole thing,” Fok added.

The trust’s parent Hutchison Whampoa is controlled by Hong Kong’s richest man Li Ka-shing (李嘉誠).

The IPO was 2.9 times -subscribed, with 3.8 billion units sold to institutional investors and the public.

“You have set the record as the first container port business trust to be listed publicly in the world and the US$5.5 billion raised is the biggest IPO in Southeast Asia and the biggest IPO in the world in 2011 to date,” SGX chairman Chew Choon Seng (周俊成) said. “The level of interest in the issue and the demand that has been generated in somewhat challenging market conditions testify to the quality of the assets in the trust and to the market’s confidence in the board and management of the trust.”

The Singapore market has lost almost 3.50 percent over the past four days as global stocks tumbled amid growing concern after the earthquake and tsunami battered Japan on Friday last week and led to fears of a meltdown at a power plant northeast of Tokyo.

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