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The volume and value of initial public offerings in Hong Kong soared in the first half of the year, according to a new analysis by PricewaterhouseCoopers. Despite some companies getting cold feet and pulling planned listings in recent weeks, PwC believes the Hong Kong exchange is on track for another robust year.

Last year, the number of IPOs in Hong Kong rose by 56% and the value of funds raised increased by nearly 80%. In the first half of this year, the volume of listings rose by 55% and the value of money raised nearly tripled when compared with the same period in 2010. The number of expected IPOs in 2011—110, reckons PwC—should be roughly equal to the previous year. However, the value of fundraising, forecast at HK$380bn (US$48.8bn), is expected to fall by 15% from 2010.

Choppy markets led six firms to scrap planned Hong Kong IPOs last month, although the pipeline still looks relatively healthy. Chinese retailer Sun Art, for example, reportedly closed the books early on its HK$8bn listing. If not as lucrative as last year, the IPO market in Hong Kong still looks to be one of the busiest in the world this year.

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Today, in Vientiane, trading began at the Lao Securities Exchange. The market was open from 8:30 to 11:30. Shares worth 2.1bn kip (US$262,000) changed hands, with prices for the exchange’s two listed companies, EDL-Generation, a power company, and BCEL, a bank, closing up from their IPO levels (BCEL gained an impressive 45%). Foreign investors can acquire up to 10% of EDL-Generation but are barred from trading BCEL’s shares.

These modest beginnings hide grand ambitions. Officials expect firms to raise US$8bn on the exchange over the next five years, no doubt inspired by neighbouring China’s heady mix of both communism and capital markets.

The chatter about potential bubbles in emerging-market equities is growing louder. Investors in Indonesia, which boasts one of the world’s best-performing markets so far this year, are certainly (irrationally?) exuberant.

The past two days have seen more than US$1bn raised in two IPOs in Jakarta, with today’s listing of noodle maker Indofood CPB worth almost double the previous year’s total for all Indonesian IPOs. Some other recent listings have already doubled in value, such as hotelier Bukit Uluwatu Villa and Bank Jabar Banten, both of which listed in July. Meanwhile, telecoms group Sarana Menara Nusantara has surged by a dizzying 700% since listing in March. Many more issues are in the pipeline, if only for supply to keep up with demand.

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Perhaps inspired by the rebound in global financial shares in the preceding days, Industrial and Commercial Bank of China unveiled the details of its long-planned rights issue on July 28th. The firm, the largest lender by market value in China and the world, said it would raise Rmb45bn (US$6.6bn) by selling new shares to existing investors, including its controlling shareholders in the Chinese government.

The plan comes at a crucial time for Chinese banks, which generally need to raise fresh capital after a lending binge in 2009 and into early 2010. The group effort enjoyed a good start when Agricultural Bank of China made a surprisingly strong initial public offering in early July that may eventually raise up to US$22.1bn. But the fundraising queue continues to grow and doubts persist about whether private investors can absorb even the minority stakes on offer.

Read more at Financial Services Briefing: “Rights plan for ICBC” (July 28th)

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

The music has recently sped up in what looks like a pan-Asian game of musical chairs. Unlike the parlour game, this match pits some of the world’s biggest financial firms in a race to issue shares into what increasing looks like a bear market.

In China, Japan, Hong Kong and Singapore, financial giants are readying large-scale share offerings. The mounting concern now is that a true bear market may suddenly close the door to many of these issues. It’s time to grab a seat before all the chairs disappear.

Read more at Financial Services Briefing: “Musical shares” (May 20th)

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

Initial public offerings are typically celebratory events. That wasn’t necessarily the case at Dai-ichi Life, a Japanese insurer, even though the company’s US$11bn listing this week was the largest IPO in Japan since NTT DoCoMo went public in 1998.

The move is designed to give the company—Japan’s second-ranked life insurer—the financial flexibility to expand, perhaps by making additional share offerings. Although it operates in Asia’s largest insurance market by far, prospects aren’t bright for life insurers in Japan. The company’s recent financial results make for dire reading and interest among foreign investors in the IPO was subdued.

Dai-ichi already has minority stakes in life insurers in fast-growing Vietnam, Thailand and India. If the company is serious about foreign expansion it needs to act fast, as many western insurers have been expanding their footprints in emerging Asia for some time. Recent deals in the region by America’s MetLife and Britain’s Prudential have also solidified their positions there.

Read more at Financial Services Briefing: “Listing southward” (March 24th)

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

On Wednesday, investors gave a vote of confidence to the IPO market, at least in Brazil. Spanish banking giant Santander raised R14.1bn (US$8.1bn) by selling a stake in its Brazilian unit. It was the biggest listing in the country’s history and the largest in the world since March 2008.

Investors are making an expensive, somewhat risky bet on Santander’s ability to integrate and expand the disparate elements of its Brazilian presence. They are also wagering on the durability of recovery in Latin America’s largest country.

Read more at Financial Services Briefing: “Big bets on Santander offering” (October 7th)

Brazilian IPOs

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