Shares in telecoms giant China Tower rise as IPO lock-up period ends. But will it be the exception or the rule this year?
- China Tower’s shares rise by 1.25 per cent on Friday
- IPO lock-up period at more than 50 companies to expire in first quarter
The lock-up period for shares held by cornerstone investors in China Tower, the world’s largest telecoms tower operator, expired on Friday. The Beijing-based company listed in Hong Kong for HK$54.3 billion (US$6.9 billion) in August, making it the city’s largest initial public offering in 2018.
Its 10 cornerstone investors, which include Hillhouse Capital, Och-Ziff Capital Management Group and Alibaba Group Holding, which owns the South China Morning Post, bought a combined US$1.4 billion worth of shares during its flotation, according to Bloomberg.
With these investors now able to sell their stock holdings, China Tower’s shares rose by 1.25 per cent to HK$1.62 on Friday. The company is expected to benefit from 5G.
“The buying interest of the stock is still quite substantial because the market expects that after 5G starts, the most beneficial stock will be China Tower,” said Kenny Tang, chief executive of China Hong Kong Capital Asset Management.
And while many stocks that were floated in Hong Kong last year have performed poorly, companies such as China Tower, which have better prospects, can expect to do better.
Tang said that although China Tower had risen by about 30 per cent over its listing price of HK$1.26, its valuation remained lower than that of its competitors in the United States.