Tuesday, January 7, 2020
Martin Hennecke

Developer up in gray as IPO market booms
Shares of mainland property developer JY Grandmark (2231) rose in the gray market before its market debut last night, despite only oversubscribed by 0.89 times in the retail portion, the lowest in a month. JY Grandmark, chaired by Michael Chan Sze-ming, the son of Chan Cheuk-yin, another mainland developer Agile's (3383) vice-chairman, saw its price rise 1.27 percent to HK$3.2 in the Bright Smart gray market, while also rising 3.8 percent to HK$3.8 in the Philip Securities gray market. Separately, Chinese heart valve replacements developer Venus Medtech (Hangzhou) raised HK$2.59 billion after pricing its initial public offering at HK$33, the higher end of its indicative price range. Meanwhile, the Hong Kong IPO market is enjoying its hottest quarter among retail investors in four years. The median retail subscription ratio for IPOs since the start of October is 13 times, the highest since the second quarter of 2015, data compiled by Bloomberg showed. Helped by Alibaba's (9988) mega HK$13.17 billion share sale, Hong Kong is on track to surpass last year in terms of fundraising for first-time share sales, with companies raising US$36.6 billion (HK$285.48 billion) so far, just US$200 million short of 2018's total - which itself was the highest since 2010. In other markets, Postal Savings Bank of China (1658) said investors had opted out of paying for 3 percent of shares on offer in its Shanghai listing - a rare development that underscores growing concerns over problems in China's banking system. China's biggest bank by number of branches is seeking up to 28.45 billion yuan (HK$31.58 billion) in the first part of the share sale, which was 79 times oversubscribed - a low level as mainland share offerings are often thousands of times oversubscribed. Elsewhere, the institutional tranche of Saudi Aramco's planned IPO has been almost three times oversubscribed, receiving orders worth 189.04 billion riyals (HK$50.4 billion).

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