Swire investor raises HK$1b in first placement of lunar year
An institutional investor in Swire Pacific cashed in HK$1.02 billion yesterday by selling 11.7 million shares after the market close, the first share placement since the Lunar New Year, according to a source close to the offering.
The investor, whose identity is not revealed in the sale document, sold the shares at HK$87.50 each. The price represents a discount of 4.48 per cent to the stock's close of HK$91.60 yesterday.
Morgan Stanley was the sole bookrunner of the share sale.
Excluding John Swire & Sons, the largest shareholder of Swire Pacific with 15.15 per cent, seven financial institutions own stakes comprising more shares than the number offered in the deal. The institutions include JP Morgan, Bank of New York and First State Investment, according to Bloomberg data.
The Hang Seng Index gained 1.92 per cent yesterday but is 14.73 per cent down from the start of the year. Swire Pacific shares are about 20 per cent off the peak of HK$115.10 hit in October last year.
The book for the Swire Pacific placement was closed quickly as investors had been bargain hunting for high-quality stocks, sources said.
'Investors are keen on seeking valuation-driven stocks amid an unstable environment in a bid to minimise their risk. Therefore, Swire Pacific's well-diversified portfolio could meet their needs,' a fund manager said.
However, investment banks are concerned about Swire Pacific's growth outlook, on signs of slowing global economic growth.
'We expect spot rentals to peak in Swire's office property portfolio in the second half and may fall 10 per cent next year,' according to a report from Goldman Sachs. 'In addition, Swire's sluggish pace of expansion in China's property sector remains an overhang.'
Swire recently announced a retail-led mixed-use project in Beijing in partnership with Sino-Ocean Land Holdings. It has a projected investment of four billion yuan.