UPDATE 1-Chinalco unit set to price $400 mln HK IPO near middle of range-sources
* IPO to be priced at HK$1.75, near mid-point of range - sources
* Chinalco Mining IPO biggest in Hong Kong in one month
* Share offering comes on the back of gains in local stocks
HONG KONG, Jan 24 (Reuters) - A unit of China's top aluminium group Aluminum Corp of China (Chinalco) is set to raise $400 million in the biggest Hong Kong IPO in about one month, benefiting from gains in the local stock market and keen demand from cornerstone investors.
Underwriters have recommended that Chinalco Mining Corp International price the IPO at HK$1.75 per share, but the final decision will be made at a Chinalco board meeting in Beijing, sources with knowledge of the deal said on Thursday. The sources declined to be named as they were not authorized to speak publicly on the matter.
Deal starved-investment bankers and prospective IPO candidates have kept a close eye on the share offering to gauge whether investors are ready to jump back into the market after a dismal year for new listings. In 2012, the volume of new issuance in Hong Kong fell to the lowest since 2008.
Chinalco Mining, which is developing a copper-molybdenum-silver mine in central Peru, offered 1.76 billion new shares, putting the total deal at HK$3.1 billion ($400 million). The Chinalco unit had marketed the IPO at HK$1.52 to HK$1.91 per share.
Five cornerstone investors agreed to buy a combined $240 million of shares in the IPO, securing demand for more than half of the deal, according to the IPO prospectus. The investors were something of a who's-who of the commodities world, including trader Trafigura, a unit of the Louis Dreyfus Commodities group and mining company Rio Tinto plc.
An external communications firm, acting on behalf of Chinalco Mining, declined to comment on the IPO details.
Pricing above the midpoint of the range could bode well for upcoming deals, including the up to $174 million IPO by PanAsialum Holdings and $105 million listing by Time Watch Investments Ltd.
Watchmaker Time Watch and PanAsialum, which produces aluminium accessories including shells for the iPhone and iPad, are set to price their deals next week, Thomson Reuters publication IFR previously reported.
The Chinalco Mining IPO is the biggest in Hong Kong since China Machinery Engineering Corp (CMEC) raised $575.4 million in mid-December.
CMEC's stock has surged 30 percent from the offering price, while the Hang Seng Composite Index - Materials of mining and materials companies is up 7.7 percent over the same period.
BNP Paribas and Morgan Stanley were hired as joint global coordinators, with CCB International, China International Capital Corp (CICC), HSBC and Standard Chartered Plc also acting as joint bookrunners for the IPO.
Chinalco Mining plans to use 30 percent of the proceeds to fund investments in the Toromocho Project in Peru, with another 30 percent set aside to pay down a loan to its parent and 30 percent for acquisitions and expansion of non-ferrous and non-aluminum projects.
The remaining 10 percent will be used for working capital and general corporate purposes, the company said.
Chinalco Mining is set to start trading on the Hong Kong stock exchange on Jan. 31.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.