11 cornerstone investors back Haitong

PUBLISHED : Thursday, 19 April, 2012, 12:00am
UPDATED : Thursday, 19 April, 2012, 12:00am


Mainland brokerage firm Haitong Securities has attracted enough institutional investors to launch its much-delayed initial public offering in Hong Kong, market sources said yesterday.

The firm now has 11 cornerstone investors who have pledged a total of US$557 million to buy H shares in Haitong, which aims to raise as much as US$1.77 billion through its Hong Kong listing, selling 1.23 billion of shares at between HK$10.48 and HK$11.18 per share.

The institutional investors include Sumitomo Mitsui Trust Bank, one of the two cornerstone investors who pledged to invest in the IPO last December, when Haitong called off the initial public offering, blaming volatile markets. It said it would invest US$12 million in the new shares, unchanged from its December commitment.

But Warburg Pincus, which last December pledged to invest US$210 million in the IPO, is not a cornerstone investor this time.

Luxembourg investment company PAG and global investment firm D.E. Shaw are the major cornerstone investors, pledging US$300 million and US$100 million respectively.

World Prospers and Progress Investment Management, both linked to Dah Sing Financial Holdings, are among the cornerstone investors. The rest are: Albertson Capital, KGI Finance, Leading Investment and Securities, Oman Investment Fund, SBI Holdings, and Toyo Securities.

Traders said Haitong's IPO was expected to be price in the middle of its indicative range after its A shares gained 4 per cent to close at 10.30 yuan yesterday, outperforming the Hong Kong and mainland markets.

The brokerage firm was buoyed by an International Monetary Fund forecast on Tuesday predicting a rebound in China's economic growth in 2013, and by speculation of monetary easing on the mainland following India's interest rate cut this week.

But retail investors would be wary of mainland financial stocks, which were vulnerable to any negative developments in China's macroeconomic policies, traders said.

Haitong Securities intends to fix its H-share offer price tomorrow, and begin trading on April 27.