Bloomberg: IPO issuers increasingly reserve shares for allies
HK01 · 1 SOURCESabout 3 hours ago2 MIN
Summary
More Hong Kong IPO issuers are reportedly deciding for themselves which investors get allocations, setting aside stakes for strategic investors, business partners and other closely connected institutions often described as a “friends-and-family” group. The change is emerging as Hong Kong’s fundraising market heads for a potentially record year, helped largely by Chinese companies in the artificial intelligence supply chain
Key Points
- Bloomberg, citing people familiar with the matter, said more issuers are reserving IPO allocations for strategic investors, business partners and other closely connected institutions, while some traditional funds struggle to obtain shares
- M&G Investments Asia equity portfolio manager Vikas Pershad said one of the biggest post-pandemic changes is that company management now participates very directly in selecting investors
- Bloomberg-compiled data showed that more than 100 companies listed in Hong Kong this year posted a weighted average first-day gain of about 28%, underscoring strong demand for new listings
- Printed circuit board maker Victory Giant Technology, listed as stock code 2476, completed one of Hong Kong’s biggest IPOs in April and its shares jumped 50% on debut
- In that US$3 billion deal, people familiar said more than 20% of the shares were allocated to some major Nvidia shareholders, while other shares went to suppliers, Chinese funds with existing ties, and cornerstone investors that obtained more through bookbuilding
Why It Matters
For Hong Kong investors, the report points to a market in which access to hot IPOs may depend less on traditional fund relationships and more on issuer preferences. With first-day gains running high, who gets allocated stock can materially affect returns and shape perceptions of fairness in the city’s listing market