By Prudence Ho
HONG KONG--Chinese brokerage Huatai Securities Co. plans to seek
approval for a Hong Kong initial public offering that could raise
as much as $3.5 billion.
Should Huatai list its stock, the IPO would be the third-largest
globally this year, after a $4.8 billion February listing by
Spanish airport operator Aena SA in Madrid, and a $4.1 billion Hong
Kong IPO by GF Securities Co. earlier this month.
Shares in GF, China's fourth-largest broker by assets, rose 35%
when they began trading. Orient Securities Co., a smaller Chinese
brokerage, launched a heavily oversubscribed Shanghai IPO that
raised US$1.6 billion last month.
Huatai is planning to seek approval from Hong Kong Exchanges
& Clearing Ltd. next week for a Hong Kong listing that could
raise between $3 billion and $3.5 billion, people familiar with the
situation said Monday. If the firm gets approval, it will start
gauging investor appetite in May and list in Hong Kong in June, the
people said.
The Huatai offer could help cement Hong Kong's position as the
top global listing destination. The city is currently the top venue
for new listings in terms of fundraising value, followed by
Shanghai and London, according to Dealogic.
Besides Huatai, other securities firms planning to list in Hong
Kong include Guolian Securities Co., a smaller securities firm that
is Royal Bank of Scotland Group PLC's partner in China.
Some already-listed brokerages are looking to sell shares to
take advantage of the current bull market for Chinese stocks. Citic
Securities Co., the largest brokerage in China, and China Galaxy
Securities Co., which are already listed in Hong Kong, have
announced plans to sell shares worth--at most--$10 billion in
private placements.
In a private placement, shares are sold to no more than 10
investors.
Investors expect Chinese brokerages will benefit from current
market strength in both mainland China and Hong Kong. The Hang Seng
Index, the market benchmark in Hong Kong, which has a strong
weighting of mainland stocks, rose to fresh seven-year highs
Monday. Chinese regulators spurred the rally by allowing mutual
funds to buy shares in the city using a new trading link, starting
in March.
The brokerage firms, which also underwrite IPOs, are also
expected to benefit from a faster pace in approvals of listing
applications this year in China.
Huatai's unit Huatai Financial Holdings (Hong Kong) Ltd, J.P.
Morgan Chase & Co. and UBS AG are the lead banks for the
deal.
Write to Prudence Ho at prudence.ho@wsj.com
Access Investor Kit for GF Securities Co., Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CNE0000008L2
Access Investor Kit for Hong Kong Exchanges & Clearing
Ltd.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=HK0388045442
Subscribe to WSJ: http://online.wsj.com?mod=djnwires