HK looks at yuan IPO options
Source: Bloomberg News |
June 23, 2011, Thursday
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Print Edition
Print Edition
HONG Kong Exchanges & Clearing Ltd, the world's largest bourse operator by market value, is considering letting investors subscribe for yuan-denominated initial public offerings using Hong Kong dollars.
"Letting people subscribe for yuan IPOs using Hong Kong dollars will help avoid the situation where investors are unable to use margin financing with yuan," Charles Li, chief executive officer of the exchange, said yesterday.
Billionaire Li Ka-shing's Hui Xian Real Estate Investment Trust raised 10.5 billion yuan (US$1.6 billion) in Hong Kong's first yuan-denominated IPO in April, paving the way for other products in the currency. The city is seeking to become China's offshore currency center, with yuan debt sales doubling last year and the government looking to introduce other products.
The exchange is targeting more yuan-denominated IPOs this year, said Eric Landheer, head of issuer marketing. It hasn't received other applications yet, Charles Li said.
An IPO may have a tranche denominated in yuan, and another in Hong Kong dollars, and the exchange may allow investors to switch between the two tranches, Charles Li said. It may also allow listed companies to sell shares through placements denominated in yuan, he said.
Allowing investors to buy the shares in Hong Kong dollars would reduce the "stress" on the yuan pool in the city, said Bryan Chan, head of the exchange's yuan product task force.
"Letting people subscribe for yuan IPOs using Hong Kong dollars will help avoid the situation where investors are unable to use margin financing with yuan," Charles Li, chief executive officer of the exchange, said yesterday.
Billionaire Li Ka-shing's Hui Xian Real Estate Investment Trust raised 10.5 billion yuan (US$1.6 billion) in Hong Kong's first yuan-denominated IPO in April, paving the way for other products in the currency. The city is seeking to become China's offshore currency center, with yuan debt sales doubling last year and the government looking to introduce other products.
The exchange is targeting more yuan-denominated IPOs this year, said Eric Landheer, head of issuer marketing. It hasn't received other applications yet, Charles Li said.
An IPO may have a tranche denominated in yuan, and another in Hong Kong dollars, and the exchange may allow investors to switch between the two tranches, Charles Li said. It may also allow listed companies to sell shares through placements denominated in yuan, he said.
Allowing investors to buy the shares in Hong Kong dollars would reduce the "stress" on the yuan pool in the city, said Bryan Chan, head of the exchange's yuan product task force.
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