Investors responded coolly yesterday to the first yuan-denominated initial public offering (IPO) outside of China that is seen as a major step in Beijing’s efforts to broaden the use of its currency.
Units in Hui Xian Real Estate Investment Trust (匯賢房地產投資信託基金) were trading in Hong Kong at 4.75 yuan, down 9.4 percent from the offer price of 5.24 yuan, which was at the bottom end of the proposed issue price range. They fell as low as 4.66 yuan at one point, with analysts blaming the poor performance on the relatively low returns the trust is offering.
The IPO raised 10.5 billion yuan (US$1.6 billion). The international portion of the IPO was “moderately oversubscribed,” while Hong Kong investors applied for 2.2 times more units than were available to them, according to a company announcement.
The IPO is being keenly watched by other companies looking to launch their own yuan-denominated financial products to tap surging investor demand for China’s currency, which has strengthened about 5 percent against the US dollar over the past year.
Beijing is promoting Hong Kong as a platform for yuan-based international banking. Hong Kong banks started handling yuan in 2004 and now offer services including deposits, credit cards and trade financing that allows foreign companies to pay Chinese business partners in yuan. Beijing began allowing foreign companies to issue yuan debt last year. The World Bank, the Asian Development Bank, Caterpillar Inc and McDonald’s Corp have sold yuan-denominated bonds to finance activities in China. Yuan stocks are seen as the next logical step as China expands the so-called offshore yuan market.
With the IPO, “we can help China’s overall strategic development in internationalization of the renminbi,” said Charles Li (李小加), chief executive of Hong Kong Exchanges and Clearing, which operates the city’s stock exchange.
Offshore yuan products will “provide a new and important way for Chinese to invest gradually outside China,” he added.
The amount of Chinese currency in Hong Kong’s banking system surged to 408 billion yuan by the end of February, nearly four times more than in July last year.
Hui Xian’s sole asset is the Oriental Plaza, a complex in Beijing controlled by billionaire Li Ka-shing (李嘉誠), Hong Kong’s richest man. Two billion units in the trust, or 40 percent, were sold to investors.
Analysts blamed the lukewarm response to the IPO on the Hui Xian’s relatively low yield of 4.26 percent.
“You can buy a lot of REITs in Hong Kong that yield much more than that,” said Jackson Wong (黃志陽), a vice president at Tanrich Securities (敦沛證券), referring to real-estate investment trusts.
The remaining 60 percent of the trust will be owned by six companies, including Cheung Kong (Holdings) Ltd (長江實業) and Hutchison Whampoa Ltd (和記黃埔), both controlled by Li, and Bank of China Ltd (中國銀行).
Oriental Plaza consists of a shopping mall, office and apartment towers and the Grand Hyatt Beijing hotel.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained