Hong Kong’s equity punters drive up cost of money as demand for local currency increases amid fervour for initial public offerings
- Shares of Values Cultural Investment, which makes TV serials, is estimated to have been oversubscribed up to 1,500 times by retail investors, according to brokers’ estimates
- Retail tranche of Jiumaojiu International Holdings, a restaurant chain, is oversubscribed 500 times
Hong Kong's stock punters have returned to the city's market for initial public offerings, putting so much money into the fundraising by two mainland Chinese companies that they drove up the city's cost of money, which sent the local currency to a recent high against the US dollar.
Retail investors pumped some HK$138 billion (US$17.75 billion) to subscribe to the shares of TV drama maker Values Cultural Investment and restaurant chain Jiumaojiu International Holdings, which closed at noon on Wednesday, proving that the city’s status as a fundraising hub has not been affected by the seven-month long anti-government protests.
This excitement comes on the back of Alibaba Group Holding’s US$13 billion secondary listing on November 26. Shares of Alibaba, which owns South China Morning Post, have risen almost 20 per cent since. Alibaba’s listing in turn has led to a flurry of IPOs, including 22 in the past two weeks alone.
Values Cultural Investment, known for its TV serials such as The Distant Distance, Yan Yang Chun and National Spirit, is the hottest IPO among the 22 companies, as stockbrokers estimate the retail portion could have been oversubscribed up to 1,500 times.