SAIC Motor, the mainland's second-largest carmaker, plans to raise up to US$2 billion in an initial public offering as soon as the Hong Kong stock market stabilises, sources said.
'Risk appetite is next to nothing in the market right now,' a source said.
The launch of the deal was 'a question of market timing' and would come in the second half, another source said.
The Hang Seng Index hit an almost six-year high at 17,301.79 points last month but has since fallen to close yesterday at 15,973.11 on investor fears of continued interest rate increases. Despite the slump, the index is still 7.37 per cent ahead this year although analysts and investors expect the volatility to continue until the summer.
SAIC's smaller rival, Dongfeng Motor Group, which raised $3.97 billion in December last year, trades at 13 times estimated earnings next year. Its shares have more than doubled since it listed and closed at $3.425 yesterday.
SAIC expects to attract investors with plans to make luxury cars based on foreign models and competes directly against Nanjing Automobile Group in producing cars based on Rover models.
