HONG KONG'S INITIAL public offering market has always been idiosyncratic. And with massive liquidity chasing the local market since the economy turned smartly from its Sars-induced funk in the first half of 2003, the heat behind demand for Hong Kong new issues, particularly China plays, turned from lukewarm to white hot.
In the first quarter of this year, new records were set for subscription levels for retail tranches, which commonly hit several hundred times the amount offered. In some offerings, many of the more than 200 local retail brokers, who make a good living providing significant margin financing to retail punters looking to stag the next hot deal, drew down their facilities with local banks to their limits.
Dealogic data indicate that 42 IPOs in 2003 raised just US$1.04 billion. In the first quarter of 2004, by comparison, 15 IPOs netted US$3.06 billion. It's an impressive performance, but...
