Graff Diamonds I.P.O. set for big sparkle in HK

PUBLISHED : Friday, 04 May, 2012, 12:00am
UPDATED : Friday, 04 May, 2012, 12:00am

Ultra-high-end jewellery maker and retailer Graff Diamonds got Hong Kong stock exchange approval yesterday for a listing worth up to US$1 billion, market sources said.

The initial public offering could be the biggest in Hong Kong by an international issuer so far this year, but details of the issue, including its timing, have yet to be confirmed.

It would also be the biggest IPO in Asia excluding Japan after the US$600 million listing in Thailand of the property fund of Tesco's Thai unit, according to data provided by research firm Dealogic.

Haitong Securities, listed on the Shanghai Stock Exchange, raised US$1.7 billion in a share offering in Hong Kong last month, the biggest new listing so far in the region.

While Hong Kong has had more IPOs this year, they have been smaller. Including Haitong, there have been 24 new listings, which raised a total of US$3.1 billion, so far this year, compared with 18 deals, which raised US$4.5 billion, over the same period last year, according to Dealogic. In Asia excluding Japan, both the number and volume of new listings have dropped. The region has raised US$13.4 billion through 126 deals so far this year, down from US$32.3 billion through 196 deals during the same period last year.

Brokers said the market would be eyeing the Graff IPO with keen interest because of its unique market position. They said the listing would also be a breath of fresh air in a market that does not want to rely too heavily on listings of mainland companies.

Kenny Tang Sing-hing, general manager of AMTD Financial Planning, said investors would be bullish on the stock following the strong performance of Italian luxury brand Prada, which raised HK$16.7 billion in June last year. Prada shares closed yesterday at HK$52.80, comfortably higher than the HK$39.50 offer price.

'Graff Diamonds has a unique business model in terms of the rarity of its stones and its scope of business, which covers both production and retail of jewellery pieces,' Tang said.

Graff, founded by dealer Laurence Graff, specialises in rare gems and diamonds. In 2010, the firm paid a record 45.4 million Swiss francs (HK$386.5 million) for a 24.78 carat pink diamond at auction.

Graff's clients include billionaires, celebrities and royalty, including Indian steel magnate Lakshmi Mittal, media mogul Oprah Winfrey and the Sultan of Brunei.

The firm has some 30 outlets, including a store in Hong Kong's Peninsula Hotel. It plans to open a second shop in the city and new shops in Hangzhou and Macau this year to further tap into China's growing high-net-worth population.

The Graff IPO will be managed by Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley.

Listings in the pipeline this year include Sany Heavy Industry, which could raise up to US$3.3 billion, Chinalco's Peruvian copper mining assets (US$1 billion), and China Everbright Bank (US$1.9 billion).


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