Banks jostle for mega HK share sale with 0.01pc fees

Mainland banks are jostling for work on Contemporary Amperex Technology's planned mega listing in Hong Kong with China International Capital Corporation (3908) willing to work for commissions as low as 0.01 percent, the Financial Times said.

Morgan Stanley estimates the blockbuster secondary listing by the Chinese electric car battery giant known as CATL may raise up to US$7.7 billion (HK$60 billion), which could be one of the biggest share sales the city has seen in recent years.

CICC, CSC Financial (6066), JP Morgan and Morgan Stanley are expected to be the main underwriters.

CATL plans to offer commissions of 0.2 percent, while CICC and CSC expressed willingness to take on the listing at a rate of 0.01 percent of the amount financed, the report said.

For comparison, in 2019, Alibaba’s (9988) second listing in Hong Kong raised about US$11.2 billion, with an underwriting commission of 0.25 percent, while Midea's (0300) listing last year raised US$4.6 billion with a 0.6 percent commission.

Chinese investment banks’ willingness to accept ultra-low commissions for underwriting major projects signals that the mainland's market for initial public offerings is facing limited business and has not recovered, the report said.

CICI CAO