Chinese oil rig manufacturer Honghua Group plans to raise up to $480 million in a Hong Kong initial public offering. Honghua, which had pushed back its IPO in January due to poor market conditions,is offering 833.36 million shares, or 25% percent of its enlarged share capital.
If it happens as planned Honghua will be the first company to tap the Hong Kong market with an IPO since the Lunar New Year.

At the same time, China Railway Construction (one of its products is the illustration) is marketing its Hong Kong and Shanghai IPO, which is expected to raise a combined $4 billion in what would be the world’s biggest IPO this year.

Although the market is still down 14.6% this year, a successful Honghua or China Railway Construction listing would encourage other firms that had postponed IPOs to relaunch their deals.

A warning note was struck by Adam Tam, fund manager at Pacific Sun Investment Management, who said, ‘Market sentiment has not fully recovered yet. Fund-raising activities are still difficult, as investors are very selective.’

Other forthcoming IPOs include food and beverage producer Want Want Holdings, which is premarketing for a $1 billion IPO.

Chinese department store Maoye International is expected to relaunch its IPO after Goldman Sachs added UBS and HSBC as sponsors for a deal that was set to raise up to $905 million before it was pulled in January.
Source: Reuters

Chinese share prices closed about 7% lower as investors dumped stocks after last week’s sell-off on Wall Street amid lingering fear of a US recession.

On Friday, the Dow Jones Industrial Average fell 1.38% to 12,207.17, ending a two-day rally boosted by the US Federal Reserve’s emergency federal funds rate cut of 0.75 percentage points.

China’s main stock index plunged 7.19%, its fourth biggest drop this decade, because of sliding global markets and heavy snow across central and eastern China, which is disrupting food and energy supplies.

The benchmark Shanghai Composite Index, which covers both A and B shares, plunged 342.39 points. The fall neared last Tuesday’s 7.22%drop, the highest percentage points loss in 7.5 months.

A Bohai Investment analyst said the once isolated domestic market was now more influenced by other world markets.

He added there was little buying interests as investors expected the US subprime mortgage crisis wouldn’t be tackled in a short time.
Source: China Daily