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Japanese retail investors buy China Power IPO
(Xinhua)
Updated: 2004-10-11 14:21
Demand from Japanese retail investors for the China Power International
Development Ltd.’s initial public offering was overwhelming, with orders worth
more than US$4 billion for the US$12.5 million in shares allocated, a source
said Friday.
“Japanese investors are convinced that the company has growth potential
because of a planned asset injection by its parent company,” said the source,
referring to China Power’s plan to acquire further generating assets from its
parent, China Power Investment Corp., in what would be a boost to earnings.
Tapping funds worth US$320 million, China Power’s IPO is the smallest among
the five Hong Kong-listed companies that have sold their shares to Japanese
retail investors so far this year through the Public Offering Without Listing
(POWL) program.
POWL is a process regulated by Japanese financial authorities that allows
overseas listings to sell their shares to Japanese retail investors.
Impressed by the strong economic growth in China, Japanese retail investors
have, since 2002, invested at least US$1.26 billion on a spate of Hong Kong
listings through the POWL process.
Although the amount of orders received from Japanese retail investors were
well above China Power’s total fund-raising size, Japanese investors have only
been allocated 3.8 percent of the mainland power firm’s IPO — the lowest level
among recent share sales.
The source said that was because Hong Kong retail investors received a bigger
allocation of China Power shares in view of the popularity of the offer, and two
big institutional investors alone took up 18 percent of the total offering. The
China Power IPO’s retail tranche was 290 times subscribed, the source said.
The boom in POWL listings by Hong Kong firms slowed in the late 1990s, but
resumed with the listing of BOC Hong Kong (Holdings) Ltd. in July 2002. Since
then, 11 Hong Kong-listed companies have gone the POWL route.
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