Hong Kong's IPO market is turning Chinese

China Literature

08/11/2017 03:07

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are his own.) 
    By Pete Sweeney 
    HONG KONG, Nov 8 (Reuters Breakingviews) - China Literature 
smashed the chandeliers in its $1.1 billion Hong Kong debut, 
soaring more than 80 pct in early trade. As local punters swarm 
into mainland tech, the new-issue market is mimicking 
distortions common in China. For the exchange, it's a good 
problem to have. 
          
    Full view will be published shortly. 
    On Twitter https://twitter.com/petesweeneypro  
     
    CONTEXT NEWS 
    - China Literature, the online publishing arm of Tencent, 
leapt more than 70 percent in its first morning of trading in 
Hong Kong on Nov. 8. 
    - If sustained, such a first-day gain would rank among the 
three best-performing debuts this year by any company worth more 
than $500 million, according to Thomson Reuters data. 
    - The company, 62 percent owned by Tencent, raised $1.1 
billion through its initial public offering, making it Hong 
Kong's largest technology IPO in a decade. Retail investors bid 
for 625 times the shares on offer, tying up HK$521 billion ($67 
billion), Reuters said. 
    - Hong Kong Exchanges and Clearing, the operator of the 
stock exchange, plans to let mainland investors buy into Hong 
Kong IPOs via a so-called "Primary Connect" scheme. HKEX Chief 
Executive Charles Li told Reuters Breakingviews in an interview 
on Sept. 5 that this programme would make the exchange more 
attractive to foreign issuers such as Saudi Aramco. 
    - China Literature shares priced at HK$55 on Nov. 1. By 
late-morning on Nov. 8, they stood 88 percent higher at 
HK$103.50.  
    -  For previous columns by the author, Reuters customers can 
click on  SWEENEY/  
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Tencent unit China Literature surges more than 70 pct in Hong 
Kong debut     urn:newsml:reuters.com:*:nL3N1NE1AM 
BREAKINGVIEWS-Hong Kong tech fervour defies Western IPO wobbles  
   urn:newsml:reuters.com:*:nL3N1ND1D1 
BREAKINGVIEWS-Hit IPO undercuts the case for new Hong Kong board 
    urn:newsml:reuters.com:*:nL4N1M91FW 
BREAKINGVIEWS-Glencore's Hong Kong exit sends message to Aramco  
   urn:newsml:reuters.com:*:nL4N1N61OE 
BREAKINGVIEWS-Hong Kong's fresh Aramco pitch is flawed    
 urn:newsml:reuters.com:*:nL4N1LM2UQ 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Editing by Quentin Webb and Katrina Hamlin) 
 ((pete.sweeney@thomsonreuters.com; Reuters Messaging: 
pete.sweeney.thomsonreuters.com@reuters.net)) 
 
Keywords: CHINA LITERATURE IPO/BREAKINGVIEWS