* Shares supported by China's decision to re-open IPO
* CICC IPO raised $811 mln in Hong Kong, priced at the top
(Adds CICC comments, China IPO activity, upcoming HK listings)
By Elzio Barreto
HONG KONG, Nov 9 China International Capital
Corp (CICC) shares jumped up to 11 percent in their Hong Kong
debut on Monday, as investors snapped up China's oldest domestic
investment bank on optimism over mainland equity activity
despite this year's market rout.
CICC's strong start was helped by China's decision on Friday
to resume IPOs after a four-month halt, a move likely to boost
investment banks' revenues, and sets a positive benchmark for a
host of other companies queued up to list.
"The timing of the reopening had been a closely monitored
exercise by the market. There are hundreds of companies keen to
go public," said Ringo Choi, Asia-Pacific IPO leader at
consulting firm EY in Hong Kong.
"This is a milestone for them, showing that the market has
CICC stock surged as high as HK$11.38 and traded
at HK$11.34 in mid-morning, compared with a 0.4 percent gain in
the benchmark Hang Seng index. The $811 million initial
public offering was priced at HK$10.28, the top of its
"The price of CICC is good, as we expected," CICC Chairman
Ding Xuedong said at the listing ceremony as bank employees
cheered every time the stock price ticked higher. Ding is also
chairman and CEO of China's sovereign wealth fund, CIC.
China's major stock indexes opened up after regulators said
they would allow initial public offerings to resume, with CICC a
The bank's debut will reassure investors rattled by China's
market turmoil and economic slowdown, with full-year growth set
to slip to a 25-year-low of under 7 percent.
Established in 1995 as a joint venture between China
Construction Bank, Singapore sovereign wealth fund GIC
Ltd and Morgan Stanley, CICC will use the funds raised
from the IPO to expand equity sales and its trading and wealth
management businesses, as well as international subsidiaries.
It counts global private equity firm KKR & Co and
TPG Capital Management among its shareholders.
Domestic investment banks like CICC and rivals CITIC
Securities and Haitong Securities are
likely to be the biggest beneficiaries from the resumption of
IPOs in Shenzhen and Shanghai, as homegrown firms underwrite the
vast majority of those deals.
Underwriting IPOs and other equity deals accounts for about
half of investment banks' revenue in Asia, compared with 20
percent in the United States and 19 percent in Europe.
The CICC IPO comes on the heels of two other large offerings
in the city, underscoring an upswing in equity activity that
investment bankers are counting on to boost revenue in Asia.
Companies in mainland China had raised $23.4 billion in IPOs
in 2015 through-mid June before regulators suspended deals, far
surpassing the $13.2 billion in all of 2014, Thomson Reuters
The halt in deals over the mid-year period mirrored a
similar move late in 2012 that closed the Chinese IPO market for
more than a year, underscoring how unpredictable mainland China
equity capital markets can be.
Deal activity has been particularly brisk in Hong Kong, with
distressed debt manager China Huarong Asset Management Co
raising $2.3 billion in an IPO and China Reinsurance
(Group) tapping markets for $2 billion in recent
Snack maker Dali Foods Group Company Ltd is pricing its up
to $1.3 billion IPO on Friday and China Energy Engineering Corp
Ltd's $2 billion deal is expected later in November, bankers
The retail portion of CICC's IPO accounted for 4.7 times the
number of shares on offer, the firm said on Friday. The
institutional tranche was "significantly over-subscribed," CICC
(Reporting by Elzio Barreto; Additional reporting by Denny
Thomas; Editing by Edwina Gibbs and Stephen Coates)