Alibaba IPO snapped up by big money

Business | Avery Chen and Agencies 15 Nov 2019

Alibaba's planned US$13.4 billion (HK$104.2 billion) share sale will be Hong Kong's first paperless stock market listing, breaking with a long-held tradition of investors placing stock orders at banks.

The decision comes with Hong Kong continuing to be gripped by violent civil unrest. Investment bankers said the logistics of having investors queuing in or outside banks while protests played out nearby would have been difficult.

The Hangzhou-based e-commerce giant has invited retail investors to subscribe for shares today, with an initial allotment for them of 12.5 million shares, or 2.5 percent of the new stock to be issued.

Alibaba has set the offer price at not more than HK$188, sources said, and the lower end of the indicative price range depends on the closing price of its American depositary shares. Based on that, a board lot of 100 shares would be HK$18,989.

Word from the market was that the institutional portion of the IPO was fully covered at yesterday's first offering.

Alibaba is issuing 500 million new shares and could raise US$13.4 billion after the over-allotment option is exercised.

It plans to price the offering on Wednesday and to start trading in Hong Kong on November 26.

The Hong Kong interbank offered rate rose for the sixth straight day ahead of Alibaba's listing. The one-month rate, which is linked to the mortgage rate, rose by 36.1 basis points to 2.7514 percent to hit a four-month high.

And after dropping a listing plan in Hong Kong, OneConnect Financial Technology, the cloud fintech arm of Ping An Insurance (2318), filed for a New York IPO with the aim of raising about US$100 million.

Back in Hong Kong, China Merchants Commercial Real Estate Investment Trust is gauging investor demand for an IPO, intending to raise up to US$400 million.

And with the aim of raising HK$4.6 billion, Pharmaron Beijing (3759) yesterday launched its IPO.

Also yesterday, shares of Singapore-based Home Control International, which makes remote-control apparatus for appliances, dropped 9.8 percent to HK$0.92 on its main board debut.

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