Hong Kong is having its worst year for listings in a decade
Hong Kong is having its worst year for IPOs since the outbreak of Sars
Around this time last year I wrote a preview of the IPOs expected to arrive on the Hong Kong market. It's telling that most of those same deals are still in the pipeline, twisting in some interminable pre-launch marketing limbo.
Take, for example, the permanent saga of China Everbright Bank. It eyed the launch of IPO marketing in July 2011, hiring no fewer than nine banks to sell its US$6 billion deal. But conditions were choppy, so it pulled back. The bank returned in August 2011, but again pulled back. It sounded investors again this summer but last week it formally axed its much reduced (up to US$2 billion) offer, citing a poor market.
China Everbright joins Sany Heavy Industry and Graff Diamonds, among other major issuers, pulling big IPOs from the Hong Kong market this year.
True, Hong Kong's new listing market is in a dreadful state. The few deals that have arrived have largely traded down, and the city is on track to have its worst year for IPOs since Sars in 2003. (See chart.)
Hongkongers have long looked to IPOs as a staple investment. New listings have normally given investors outsized returns to provide lift to their portfolios. Sometimes, a hot deal or a hot market works the whole city into a kind of mania. But not these days. The IPO market is on ice, and its absence is missed.
