Fri, Jan 17, 2020 - Page 10 News List

Asia’s IPO market hottest since 2007

Bloomberg

Companies are raising money in Asian-Pacific equity markets at the fastest pace since the global financial crisis.

Just 15 days into the new year, initial public offerings (IPOs) have reached US$5.9 billion, the most since 2007 for the period, data compiled by Bloomberg showed.

Chinese companies are leading the fundraising, accounting for 97 percent of the proceeds raised, the data showed.

The Chinese dominance is no surprise with Beijing-Shanghai High Speed Railway Co (京滬高鐵) clinching the biggest deal in Asia this year, raising US$4.3 billion in China.

Alibaba Group Holding Ltd’s (阿里巴巴) second listing in Hong Kong last year has set the stage for other Chinese companies that are considering doing the same, which bodes well for Asia-Pacific IPO volume this year.

The e-commerce giant’s Hong Kong shares have surged about 25 percent since its listing in November last year.

Trip.com Group Ltd (攜程) and Netease Inc (網易), both of which are trading on the NASDAQ, are said to be in preliminary discussions with the exchange for a potential second listing in Hong Kong

A secondary listing is seen as a hedge by Chinese companies listed in the US, as the administration of US President Donald Trump is looking at various ways to curb their access to US funding.

There are 196 Chinese companies listed on major US exchanges with a combined market value US$1.2 trillion, Bloomberg’s data showed.

Among those firms, BeiGene Ltd (百濟神州) and Alibaba are the only two with a second listing in Hong Kong.

In other IPO news, UK drugmaker GlaxoSmithKline PLC has not made plans to pursue an IPO of the consumer-health company it set up with Pfizer Inc last year, a top executive said on Wednesday, rowing back remarks made by Pfizer’s chief executive on Tuesday

The comments could expose a lack of communication between the two partners.

Pfizer chief executive Albert Bourla on Tuesday said that he expected Glaxo to pursue an IPO in three to four years.

“This is the time that we will be able to exit from this partnership, and I’m sure that this business will have a fantastic IPO,” Bourla said at the JPMorgan Healthcare Conference in San Francisco.

However, Glaxo chief strategy officer David Redfern said in an interview at the meeting on Wednesday that an IPO is not the only option.

Glaxo said at the time of the deal that it would separate and list the company within three to five years.

“Actually, we haven’t decided anything,” Redfern said. “When we announced the deal, we said we expect it to separate within three years, but actually up to five years. And it’s entirely our decision.”

Glaxo, the majority owner, and Pfizer, which has about a third of the business, are looking to focus on drug development.

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