Photographer: Paul Yeung / Bloomberg
Photographer: Paul Yeung / Bloomberg
The days of the first day’s big pop in Hong Kong’s initial public offering frenzy may be about to end.
Although the pandemic spread for most of 2020, the Chinese city’s stock market stocks and new listings were in high demand from both institutional investors and the mother and pop. With most of the new stock sales making big gains on the first day of trading, investor euphoria was justified.
It was then. Last year’s largely winning investment in stacking up in IPOs and leaving after debuting is no longer a savings: 31% of the thirteen IPOs raising more than $ 100 million reported losses on the first day this year, nearly double 17% in 2020. A median first-day move showed gains of 2.1% in 2021 from 5.7% last year, according to data collected by Bloomberg.
According to investors, it is the volatility caused by the large turnover towards shares that until now were not estimated and sensitive to economic fluctuations arising from highly valued technological and health games. Others also pointed to concerns about strengthening policies in China as they weigh on investors ’risk appetite for new shares.
“Most IPOs had a very strong performance last year, but I don’t expect that kind of move this year,” said Joohee An, fund manager at Mirae Asset Global Invest (HK) Ltd. Investors will be “more cautious” market liquidity “will not be as abundant as before,” he added.
Hong Kong bankers work 24 hours a day as IPOs and SPACs (1)
Hesitant performance
To be clear, lists of Technology and Kuaishou New Horizon Health Ltd. it still came out unusually well in February, with stocks more than doubling on the first day.
But post-listed lukewarm performances are on the rise. Chinese domestic insecticide company Last week, Cheerwin Group Ltd. fell to 20%. The biopharmaceutical company SciClone Pharmaceuticals Holdings Ltd. it finished its first floor on March 3 and is now trading 8.6% below its bid price.
The secondary wave of listing of Chinese companies listed in the United States has not always had a bright debut in Hong Kong. Autohome Inc., a Chinese online car sales website with its main list in New York, ended in Hong Kong debuted Monday with a modest 2% rise.
Not everyone is worried, given the growing concerns some expressed that global markets were in bubble territory.
“When you have these offers that don’t work well, it actually tells you that people are still cautious in what they invest and what they don’t, which is a good sign,” said Sumeet Singh, head of research at Aequitas Research in Singapore. which publishes Smartkarma. “It means the market is working well.”
Verification of reality
The next one multi-billions of dollars Baidu Inc. i Bilibili Inc. it will be closely monitored to see if the Hong Kong stock market is still strong, given its size and large profile as technology companies.
Baidu, which had a nearly 3% discount on its U.S.-listed shares, will begin trading on March 23. Investor demand for its supply was strong, with retail investors placing orders almost 100 times the shares made available to them, according to a person familiar with the matter. Bilibili, the video streaming platform that seeks to raise up to $ 3.2 billion in a second listing, is scheduled to debut on March 29th.
“I definitely don’t care,” Oliver Cox said, at best performing fund manager at JP Morgan Asset Management in general, “the long-term profit growth prospects and the quality of the companies we see coming to market are still very high and IPO prices do not affect that, ”he said.
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