SHARES of China worldwide Capital Corp surged on their Hong Kong debut yesterday as the Chinese mainland’s decision to lift a ban on initial public offerings is likely to improve business prospects for investment banks. The China Securities Regulatory Commission said investors will no longer need to freeze big sums of money for IPO subscriptions and instead can pay only after confirmation of share allocations.
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CICC’s stock was indicated to open at HK$10.90, after pricing its IPO at HK$10.28, the top of a marketing range of HK$9.12 to HK$10.28 per share.
Before Chinese regulators suspended IPOs in June, companies had raised $23.4 billion from stock-market listings, far surpassing the 2014 total of $13.2 billion.
ReOrient Research thinks the restart of the IPO market will have minimal impact on the market this time. China’s stock market officially rebounded into bull market territory last Thursday. “This is a milestone for them, showing that the market has stabilised”.
The bank was established in 1995 as a joint venture between China Construction Bank, Singapore sovereign wealth fund GIC and Morgan Stanley, according to Reuters.
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It counts global private equity firm KKR & Co and TPG Capital Management among its shareholders. Underwriting IPOs and other equity deals accounts for about half of investment banks’ revenue in Asia, compared with 20 per cent in the United States and 19 per cent in Europe.
