Hong Kong speculators should read China Literature

China Literature

19/08/2020 03:41

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Alec Macfarlane
    HONG KONG, Aug 19 (Reuters Breakingviews) - The fan-fiction
startup leaped 86% on its first trading day in 2017, but is now
underwater, alongside peers that enjoyed similarly
oversubscribed floats. Low interest rates have the city’s retail
investors back at playing IPOs, so another round of
unsustainable pops is underway.
    On Twitter https://twitter.com/AlecMac11

    
    CONTEXT NEWS
    - Record participation by retail investors in a recent Hong
Kong initial public offering, combined with high demand for
other IPOs, has inconvenienced large investors, Reuters reported
on July 31. Under Hong Kong listing rules, a deluge of orders
from retail investors reduces the portion that fund managers can
buy. This recent competition from individual investors has
forced a growing number of funds to become “cornerstone”
investors, which get priority before a deal launches but most
hold the shares for at least six months, the report said. 
    - Chinese biotech company Ocumension Therapeutics set a
record in July for an IPO over HK$500 million ($65 million) when
the retail portion was nearly 1,900 times oversubscribed. 
    - Retail investors were initially to be allotted 10% of the
HK$1.4 billion offering, but Hong Kong’s “clawback” rule, which
kicks in when the retail portion of an IPO is heavily
oversubscribed, increased that to 50%.
    - For previous columns by the author, Reuters customers can
click on  MAC/ 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Hong Kong's mom-and-pop investors squeeze funds as IPOs sizzle  
  urn:newsml:reuters.com:*:nL4N2F402J
Interim results statement    https://ir-1253177085.cos.ap-hongkong.myqcloud.com/investment/20200811/5f3267d9b459e.pdf
BREAKINGVIEWS - Ant’s dual listing could double cross Wall St   
 urn:newsml:reuters.com:*:nL4N2FC0SI
BREAKINGVIEWS - Yum China can fill a pricier bucket in Hong Kong
    urn:newsml:reuters.com:*:nL4N2EH09H
BREAKINGVIEWS - NetEase’s Hong Kong reception beckons to China
Inc     urn:newsml:reuters.com:*:nL4N2DO0D0
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Pete Sweeney and Jamie Lo)
 ((alec.macfarlane@thomsonreuters.com; Reuters Messaging:
alec.macfarlane.thomsonreuters.com@reuters.net))