Bottom line: Lufax’s Hong Kong IPO could launch by the end of this year and will get a strong reception, while Xinhuanet’s Shanghai IPO will get a similarly positive reception due to strong support from state-run investors.
Xinhuanet approved for Shanghai IPO
Just days after the stodgy Postal Savings Bank of China launched an IPO that will be the world’s biggest in 2 years, the much higher-tech P2P lender Lufax has kicked off another Hong Kong listing that’s nearly as large. More specifically, Shanghai-based Lufax has begun hiring investment banks for a listing that could raise up to $5 billion, according to new reports.
Meantime, a flurry of new domestic Chinese IPO plans is also in the headlines, led by word that state-owned online news giant Xinhuanet has been approved for a new listing in Shanghai. China stock watchers might recall that Xinhuanet’s IPO plan first surfaced in the headlines 3 years ago, but was indefinitely shelved due to repeated slowdowns and freezes for new domestic offerings due to market volatility. Read Full Post…
Bottom line: A potential merger between CICC and China Investment Securities could mark the start of a resurgence for CICC, as it seeks to regain its former glory as China’s premier investment bank.
CICC in rumored merger talks
Former leading investment bank CICC (HKEx: 3908) is making a rare appearance in the headlines, with word that it’s discussing a possible merger with second-tier brokerage China Investment Securities. I haven’t written about CICC for nearly a year since it made a relatively respectable IPO in Hong Kong after several delays and a downsizing. I and others have mostly forgotten about CICC these days, following a period of turmoil that saw most of its top executives leave after it rapidly lost its position as China’s preeminent investment bank. Read Full Post…
Bottom line: Minsheng Bank’s $1 billion deal to buy Quam could be on the brink of collapse, the victim of rapidly tumbling sentiment towards Chinese and Hong Kong brokerages amid China’s stock market sell-off.
Minsheng’s HK brokerage buy on brink of sinking?
What a difference a year makes. At this time last year stock brokers in China and nearby Hong Kong were a hot ticket, attracting billions of dollars as investors bet on their huge growth potential tied to booming stock markets in both places. But that enthusiasm has quickly evaporated as China’s stock markets undergo a massive correction, which may be a major factor behind the sputtering of a major acquisition in the space.
The deal I’m referring to is the previously announced purchase of Hong Kong brokerage Quam (HKEx: 952) by Minsheng Bank (HKEx: 1988; Shanghai: 601988), China’s oldest privately owned bank. Minsheng has just announced that a deadline for it to close the Quam investment, worth nearly $1 billion, has passed without closure, hinting the deal may be on the brink of collapse. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 27. To view a full article or story, click on the link next to the headline.
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LeTV (Shenzhen: 300104) Raises $530 Mln in 1st Funding Round for Smartphone Unit (Chinese article)
Taobao to Spin Off C2C Second-hand Goods Trading Platform Xianyu – Source (English article)
Bank of Qingdao (HKEx: 3866) HK IPO Gets Chilly Reception, Calls on Friends (Chinese article)
Citic Securities (HKEx: 6030) Says Being Probed for Securities Violations (HKEx announcement)
Uber Says China to Pass US as Company’s Largest Market by Year-End (Chinese article)
Bottom line: The pending collapse of Citic Securities’ bid for Russell Investments is the direct result of company instability due to corruption allegations and stock market volatility, and highlights the risk of doing business with big state-run companies.
Instability sinks Citic’s bid for Russell
Recent turbulence in China’s corporate world may be set to claim one of its first big victims, with word that a deal to sell fund manager Russell Investments to top Chinese brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) is on the brink of collapse. London Stock Exchange Group has been looking to sell Russell for the last few months, and Citic had emerged as the preferred buyer after several others dropped out.
But Citic Securities has suddenly become a symbol of instability in China, hit by the one-two double whammy of corruption allegations and plunging profits for its core securities brokerage business. The recent corruption allegations against some of its top officials are part of a bigger national crackdown on graft, while the woes at its core brokerage business are the result of volatility in China’s stock markets. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 23. To view a full article or story, click on the link next to the headline.
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LSE’s Sale of Russell Investments to Citic Securities (HKEx: 6030) May Collapse (English article)
58.com (NYSE: WUBA) to Invest in 100 O2O Firms This Year, May Lose $200 Mln – CEO (Chinese article)
Boeing (NYSE: BA) Plans 737 Plant in China, Pledges No US Layoffs (English article)
LightInTheBox (NYSE: LITB) Caught in Whirlpool of Unpaid Bills (Chinese article)
China Three Gorges Weighs $2.3 Bln Wind Investments (English article)
The following press releases and media reports about Chinese companies were carried on August 25. To view a full article or story, click on the link next to the headline.
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China’s State-Owned Telecoms Firms Shuffle Top Executives (English article)
Apple’s (Nasdaq: AAPL) China Business Strong in July and Aug: CEO (English article)
The following press releases and media reports about Chinese companies were carried on July 14. To view a full article or story, click on the link next to the headline.
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Chip Maker Tsinghua Unigroup Makes $23 Bln Bid for Micron (NYSE: MU) (English article)
Billionaire Wang Plans for Wanda to Expand Into Finance Industry (English article)
Xiaomi, Partners Planning to Open Privately Funded Bank? (Chinese article)
Bottom line: More than $20 billion in new fund-raising deals by China companies outside the country reflects the huge amount of global money now chasing Chinese investments, lured by the nation’s soaring stock markets.
Billions flood into Chinese companies
I was so surprised by the number of major new China-related deals churning through the fund-raising system that I decided to do some math, which showed that 5 deals in the headlines today were worth a staggering total of $21 billion. Those deals involved a wide range of topics, led by a new $9 billion privatization bid for software security specialist Qihoo 360 (NYSE: QIHU), the largest such plan to date among a wave of Chinese firms de-listing from New York.
That deal was followed in size by another similar one from Focus Media, whose $7.4 billion plan to re-list in Shanghai following its own New York privatization has hit an unexpected hurdle with an investigation of the shell company that is hosting the backdoor listing. The there’s a hefty $3.5 billion fund-raising plan by leading brokerage Citic Securities (HKEx: 6030; Shanghai:006030), which has attracted 2 of Singapore’s leading investors as it prepares to issue new shares in Hong Kong. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 18. To view a full article or story, click on the link next to the headline.
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Citic Securities (HKEx: 6030) Seeks $4.7 Bln in Share Sale; Temasek Among Buyers (English article)
Qihoo 360 (NYSE: QIHU) Announces Receipt of Proposal to Acquire the Company (PRNewswire)
Alibaba (NYSE: BABA), Foxconn in Talks to Invest $500 Mln in India’s Snapdeal (English article)
Trina Solar (NYSE: TSL) Plans $500 Mln India Plant Amid Ban (English article)
Imax (NYSE: IMAX) Sets China Unit IPO Goal at $300 Mln (English article)
Bottom line: Citic Securities’ new tie-up with China’s Social Security Fund should bring it major new business, while CCB’s Indonesian tie-up talks reflect its approach of moving slowly into emerging markets for its nascent global expansion.
Citic Securities ties with Social Security Fund
Two big finance stories are casting a spotlight on different trends in China’s rapidly transforming financial services sector as Beijing tries to create an industry that can compete with the big global players. The larger news is domestically focused, with leading stock brokerage Citic Securities (HKEx: 6030; Shanghai: 600030) in a major new tie-up with China’s Social Security Fund that will see the pair cooperate in a wide array of financial services areas. The other news is outward looking, and has China Construction Bank (HKEx: 939; Shanghai: 601939) in talks to form a relatively modest new tie-up with a local bank in Indonesia. Read Full Post…
