Asian IPOs regain momentum after blip

By Alison Leung

HONG KONG (BestGrowthStock) – After a brief lull, the Asian IPO express looked back on track on Thursday, with companies from China to Japan reiterating commitments to raise billions of dollars through stock market floats, although market volatility did cut appetites for some deals.

Sentiment took a hit on Wednesday, encouraging two companies to shelve IPOs worth more than $3 billion in Hong Kong as investors shunned risk assets because of tensions on the Korean peninsula and Ireland’s debt problems.

But as stock markets recovered on Thursday, some companies were quick to take advantage. Indonesia’s Sateri Holdings Ltd, a specialty cellulose maker, said it was pushing ahead with a Hong Kong listing that could raise as much as $600 million.

“What you are seeing is keen interest in certain transactions and in others, people are being more price sensitive,” said Crawford Jamieson, managing direct of Morgan Stanley Asia Ltd. “Especially as you get toward year-end, and in the context of macro in the last week or two, people are a little bit more selective in terms of deals.”

In Japan, drug and food company Otsuka Holdings set an indicative price range for its $2.8 billion IPO, on course to be the nation’s No. 2 float this year.

But Hong Kong-listed Dalian Port (PDA) Co Ltd (2880.HK: ), northern China’s biggest port operator, raised a below-target $857 million after pricing its Shanghai IPO in the middle of its indicative range. Dalian had already cut its offer size by 38 percent last month.

Sateri, controlled by Indonesian tycoon Sukanto Tanoto and his family, is selling 505.33 million shares in a range of HK$6.60 to HK$9.20 each. The IPO is set to be priced on December 2 and trading is scheduled for December 8.

For underwriters, this has been a profitable year as Hong Kong has been the world’s most popular destination for IPOs this year because of the city’s strong stock market recovery and its strategic location.

Companies have raised a total of $48.7 billion through IPOs in Hong Kong so far this year, according to Thomson Reuters data, compared with about $27.1 billion last year.

Agricultural Bank of China Ltd (1288.HK: )(601288.SS: ) raised a record $22.1 billion in Hong Kong and Shanghai in July and AIA Group Ltd’s (1299.HK: ) IPO last month raised $20.5 billion.

(Writing by Denny Thomas; Editing by Chris Lewis)

Asian IPOs regain momentum after blip