Cash flows in as Ant's HK IPO gets the green light

Finance | Avery Chen and Bloomberg 20 Oct 2020

Capital continued to flow into Hong Kong as investors prepared for Ant Group's mega IPO, which is expected a few days after the US presidential election.

This prompted Hong Kong Monetary Authority to sell off more than HK$20 billion to defend the currency peg.

Ant won a key approval from the China Securities Regulatory Commission for its listing in Hong Kong yesterday, paving the way for what could be the world's biggest initial public offering, while Reuters reported that Ant had passed the hearing with the listing committee of the Hong Kong stock exchange yesterday.

Ant could raise about US$35 billion (HK$273 billion) from the dual listing in Hong Kong and Shanghai at a valuation of at least US$280 billion, according to Bloomberg.

Meanwhile, the HKMA sold HK$20.38 billion to the market yesterday, after the local currency hit the strong end of the trading band with US dollar.

The aggregate balance will grow to HK$347.91 billion on October 21, the highest since March 2016.

Some people claimed on social media that some Hong Kong trust companies could help retail investors to subscribe to Ant's new shares in the international tranche, with a minimum investment of HK$400,000 plus a 5 percent handling charge. But lawyers warn that might violate rules of collective investment scheme.

In other IPO action, Shimao Services, the property management arm of Shimao Group (0813), opens a retail book today as it bids to raise up to HK$10.1 billion with a minimum investment of HK$17,373.32.

And Chinese cancer drugmaker JW Therapeutics kicked off pre-marketing for its US$350 million IPO, according to an IFR report.

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