The US$1.26bn public offering of China Zhongwang has not only transformed its chairman into China's richest person but also helped China regain its lead in the global IPO market. The latest deals statistics by Thomson Reuters showed that China leads in the global IPO race with a 36% market share (US$1.5bn from five issues), over 26% for US IPO issuers (US$1.1bn from four issues).
China Zhongwang is one of Asia's largest extruded-aluminium product makers, and its IPO is the largest worldwide so far this year, breaking the eight-month drought on billion dollar IPOs since China South Locomotive raised US$1.6bn through its August 2008 IPO.
"The listing is significant not only for its size but its role in raising investor confidence in the IPO market in Hong Kong," said Ven Tan, managing partner of Morrison & Foerster's Hong Kong office and one of the lead partners on the transaction. The firm served as Hong Kong and US legal counsel to the joint global coordinators and joint bookrunners UBS, JP Morgan, and CITIC.
"This is the second Hong Kong IPO that Morrison & Foerster has advised on since the start of the global financial crisis, and both listings have overcome extreme market volatility and uncertainty. While the market still has a long way to recover to its pre-2008 activity, the listing indicates a positive turning point in the market," Tan said.
Also according to Thomson Reuters, so far this year, eight issues worth US$1.6bn listed on the HKSE, down 66 % on the previous year. However, HKSE is the most active stock exchange globally.
China IPOs that raised more than US$100m so far 2009
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Issuer
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Proceeds raised (US$m)
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China Zhongwang
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1,265
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Changyou.com
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138
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Silver Base Group
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134
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Real Gold
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133
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