Despite Volatility Pipeline Still Strong For Chinese IPOs

August 31 saw six companies kick off investor education for Hong Kong IPOs, seeking to raise a total of US$4.2bn, compared to a year to date total of US$3.6bn, according to figures from Dealogic. In addition, there is another US$1.5bn to be raised from two imminent IPOs in Korea and a follow-on offering by Malaysian budget airline Air Asia. Looking forward, there is also pre-marketing afoot for at least another four deals next week. The two largest deals are Metallurgical Corporation of China (MCC)'s dual A- and H-share listing that could raise more than US$4bn, and US$1bn offering from Sinopharm. UBS said recently that it has a strong pipeline of Chinese equity-raising deals for Q309 despite the recent fall in the Shanghai Composite Index (SCI). Philip Partnow, deputy head of UBS's investment banking department in China, said that given an abundance of liquidity and comparatively stable valuations, 'there will be some more deals, which we cannot talk about just yet, coming out in the near future. So it is turning into a very active and busy period...it will be a very active third quarter and we hope that will continue into the fourth quarter.' Partnow added that 'in the last four to six weeks, there has been a real noticeable increase in the overall level of equity capital markets activity'.

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