Year-end IPO surge in Hong Kong

Two IPOs raise US$3.38 billion but investor sentiment remains weak.

Hong Kong’s lackluster year grew brighter last week with two companies raising a combined US$3.38 billion from their initial public offerings. Three more companies are expected to IPO before the year ends and are expected to raise a combined US$850 million.

Analysts, however, said the late IPO rush does not herald a recovery in investor confidence.

People’s Insurance Company (Group) of China raised US$3.09 billion from its IPO after pricing its sale of 6.9 billion primary shares at the lower end of the indicative price range. PICC’s listing is the biggest since the IPO of AIA in October 2010.

The other IPO was for Zhengzhou Coal Mining Machinery Group, which raised US$295 million

In the year to-date, only 42 companies have been listed on the main board of the stock exchange to raise a combined US$6.47 billion. The listing of PICC will raise the total by 48% to US$9.56 billion.

Three mainland companies began pre-marketing their IPOs last week with the goal of listing before the year ends. The trio is led by China Machinery Engineering Corporation, a power sector engineering contractor in that intends to raise US$500 million, the largest in this group.

Also to IPO will be gas producer AAG Energy, which looks to raise US$200 million, while Century Energy,a thermal and coking coalminer, hopes to secure US$150 million.