China Zhongwang Holdings, Asia's biggest maker of aluminium extrusion products, began marketing on Monday for a Hong Kong IPO to raise as much as $1.58 billion in what would be the world's largest new listing so far this year.
The company, which generates a large share of its business from the transport sector, including railways, is a beneficiary of Beijing's 4 trillion yuan ($585 billion) economic stimulus package, a big chunk of which is being spent on infrastructure.
The offering is the biggest test yet of investor appetite for new listings since the global meltdown in markets last year, and the fund-raising target is higher than the roughly $1 billion that the company and its bankers had previously considered. Some market players said Zhongwang's IPO is ambitious.
"The market sentiment has not improved enough to justify this price. It's quite hard to predict how successful the IPO will be. Institutional interest may ensure it is fully subscribed but the stock will probably make a weak debut," said Kenny Tang, associate director with Redford Securities.
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