SYDNEY, Sept 17 (Askume) – Shares in Chinese home appliance maker Midea Group rose as much as 9.5% in early trade in Hong Kong on Tuesday.It was the city’s biggest share sale in nearly four years, raising about $4 billion, raising hopes of a resurgence in large-cap equity issuance in China.
Shenzhen-listed Midea (000333.SZ) priced its Hong Kong-listed shares at HK$54.80 per share.
The per-share price rose to HK$60, up 9.5% from the IPO price, and 34.6 million shares changed hands, valued at HK$2.04 billion. Exchange data shows Midea was the most actively traded stock in Hong Kong on Tuesday.
Media sold 565.9 million shares in a deal that bankers hope will revive Hong Kong’s troubled capital markets, where share issuance has fallen to the lowest level in more than a decade.
The final price was about a 20% discount to Asia-Pacific’s Shenzhen-listed share price. Mainland Chinese stocks typically trade at higher prices than Hong Kong-listed shares.
Midea increased the number of shares for sale at closing after receiving strong demand from investors during the bookbuilding process.
According to regulatory documents submitted to the media, the institutional portion was oversubscribed 8 times and the Hong Kong retail issuance portion was oversubscribed 5.31 times.
The oversubscription rate, though higher than recent Hong Kong deals, is far lower in 2021 than during the boom years of Hong Kong’s capital markets, when deals were covered hundreds of times.
Bankers and consultants say trade tensions between China and the United States and rising global interest rates have dampened foreign investors’ interest in buying more shares in China’s equity capital markets.
The Midea deal means Hong Kong initial public offerings and listings have reached $6.5 billion so far in 2024, up from $2.7 billion a year earlier, according to Dealogic.
Data shows that at the same time in 2021, when the Hong Kong market hit a record high, transaction volume there reached US$35.7 billion.
