Bottom line: CICC’s IPO will price and debut weakly due to uncertainty about its prospects following recent management turmoil, though the stock could do well over the longer term if its new executive team performs well.
Chinese investment bank CICC is quickly discovering just how much its fortunes have faded, with word the former financial superstar has scaled back its Hong Kong IPO by 20 percent due to lack of investor interest. Just a month or two ago CICC might have been able to blame the lukewarm sentiment on the broader market, as a massive sell-off on China’s A-share markets infected Hong Kong. But strong recent demand for 2 major new listings in Hong Kong shows positive sentiment is returning, and that CICC is being left out of the rebound.
IPOs by Chinese companies have come creaking back to life in Hong Kong lately, led by last week’s strong debut for IMAX China (HKEx: 1970), the Chinese unit of Canadian big-screen theater technology company IMAX (NYSE: IMAX). Since debuting last week, IMAX China shares have risen by a third on big hopes for rapid expansion in China’s theater market. Last week, the stodgier China RE insurance company also priced shares for its upcoming $2 billion Hong Kong IPO at the top of their range, after getting strong demand. Read Full Post…
