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Pulled Hong Kong IPOs rise from the ashes

[HONG KONG] Two Hong Kong initial public offerings (IPOs) that had been postponed earlier this year are rearing their heads again.

Warburg Pincus-backed ESR Cayman, a logistics real estate platform, on Friday refiled listing documents with the Hong Kong stock exchange, a day after the world's largest brewer Anheuser-Busch InBev (AB InBev) did the same for its Asian unit.

The potential return of the two deals, which had initially sought to raise about US$11 billion between them, marks a remarkable turnaround for the fortunes of the Hong Kong stock exchange, which is languishing behind Shanghai and New York in terms of IPO proceeds. Companies have only raised US$10.8 billion in Hong Kong IPOs so far this year, less than the amount withdrawn, according to data compiled by Bloomberg.

Budweiser Brewing Company APAC - AB InBev's Asian unit - and ESR Cayman are respectively the largest and third-biggest pulled deals globally this year, the data show. Should they successfully complete their IPOs on the second attempt, it would give a boost to investor confidence and other prospective issuers waiting in the pipeline.

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Market confidence has been hit hard by ongoing anti-government protests in Hong Kong and the US-China trade war, causing some Chinese companies to shift their IPOs to the US. The fact that AB InBev and ESR Cayman had to put off their IPOs because of lackluster investor demand underscores price sensitivity among the investors, many of whom lost money on IPOs last year and are pushing back against lofty valuations.

IPO activity has picked up significantly in Hong Kong in recent weeks. Shanghai Henlius Biotech is set to be the first company since July to price a deal over US$100 million when it closes its books next week, while Bank of Guizhou, Home Credit and Topsports International Holdings are currently gauging investor demand for deals that could fetch around a billion each.

BLOOMBERG