IPO fundraisers arrive in Hong Kong despite civil strife
Political uncertainty increases caution among investors, but listing candidates are still arriving
Three listing hopefuls, including Hua Hong Semiconductor, the mainland's first custom chipmaker, have launched their fundraising plans and are looking to raise a total of more than HK$3 billion by floating shares in Hong Kong.
Against the backdrop of rising political uncertainty due to civil unrest that broke out on Sunday, a handful of institutional investors have increased their cash holdings and pulled their orders in the share sales.
"We came in to September holding slightly more cash in response to developments globally," said Mark Konyn, chief executive of Cathay Conning Asset Management, adding that weaker economic data from the mainland and the prospect of higher interest rates in the US had prompted a little more caution.
"The current stand-off between the Hong Kong authorities and the pro-democracy protesters will likely cause us to move slowly with [asset] redeployment," Konyn said.
The risk was that if the situation escalated, the immediate reaction by investors would not be positive for the Hong Kong and mainland markets.
Some money managers had pulled orders and increased cash holdings, partly due to the recent market weakness amid the protest, bankers and analysts said.
Hua Hong Semiconductor, controlled by Shanghai's municipal government, plans to raise up to HK$2.79 billion, offering 228.7 million new shares at a marketing range between HK$11.15 and HK$12.20 a share.
