MONDAY, DECEMBER 15, 2003
IPO fever grips Hong Kong
AFP
HONG KONG : A recent flurry of IPOs in Hong Kong by major Chinese firms has helped boost enthusiasm among investors to levels not seen since the internet boom nearly four years ago.
The launch of the world's largest IPO this year, by China Life Insurance last week, saw hundreds of prospective investors queuing for application forms hours before banks opened, in scenes reminiscent of the dot.com frenzy of the late 1990s.
With 2.6 million application forms being offered by China Life Insurance, - or one for every three Hong Kong residents - the rush was not as chaotic as in 2000, when tycoon Li Ka-shing's internet flagship Tom.com floated just prior to the bursting of the tech bubble. However, a dazzling 50 per cent jump in the share price of another Chinese insurer, PICC Property and Casualty, on its trading debut last month reawakened interest among investors who have seized on the chance to make a fast buck.
"It's been a tough year. Business has been terrible because of Sars, savings rates are so low they are laughable... now we have a chance to make some money from our savings. So why not?" said 37-year-old exporter Max Leung Chi-yong.
News that three Hong Kong tycoons stumped up $500 million for a piece of the China Life IPO pie served to further whet investor appetites. The retail portion of China Life Insurance ended 168 times oversubscribed, sources close to the underwriters said. The IPO price for the Hong Kong listing was fixed at $3.59 (46 cents), raising $23.23 billion for the firm.
China Life will debut in New York on December 17 and Hong Kong a day later. Small brokerages have attempted to cash in on the boom by offering retail investors easy access to credit - or margin lending - allowing them loans of up to one million dollars, with the borrower needing to put up just 10 percent of that amount.
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