* Haitong may reconsider HK offering in 2012-sources
* Haitong's Shanghai-listed shares decline 1.4 pct
* Bigger rival Citic Securities raised $1.7 bln in Sept
* Investors becoming "picky" as year winds to a close
By Elzio Barreto and Denny Thomas
HONG KONG, Dec 12 Haitong Securities Co
Ltd, China's No.2 brokerage by assets, has pulled
its up to $1.7 billion Hong Kong stock offering due to poor
market conditions, sources said on Monday, casting doubts on
upcoming deals in the latest blow for new listings in Asia's
once booming IPO centre.
The company had been set to price the offering on Monday,
after delaying the pricing on Friday as regional equity markets
swooned. Instead, Haitong decided not to pursue the offer and
will relaunch it in the first quarter of next year, depending on
market conditions, two of the three sources who confirmed the
decision to Reuters said.
"People are very cautious about their investments coming
into the year-end," said Ronald Wang, managing director of China
Merchant Securities. "They will be picky about the choices they
make," Wang added.
The fact that Haitong was not the first securities company
to raise funds in Hong Kong this year did not help matters
either, Wang added. In September, China's biggest listed
brokerage, Citic Securities, raised $1.7 billion and the stock
tumbled 10.5 percent on its first day.
"Most of the issuers will face a tough year in 2012 as the
conditions next year are not going to be any better than this
year," Wang added.
The sources had direct knowledge about the matter but were
not authorised to speak about it on the record. Haitong
Securities' investor relations executives declined comment.
"Haitong doesn't have a huge urgency for funds right now and
hence can afford to wait for the market to improve," said Core
Pacific senior analyst Timothy Li.
The cool reception to Haitong's Hong Kong offering contrasts
sharply to Shanghai IPOs of smaller rivals Soochow Securities Co
Ltd and Founder Securities. Soochow Securities, a
medium-sized brokerage based in the eastern city of Suzhou,
closed 13.4 percent higher in its trading debut in Shanghai on
Monday, after raising $511 million in an IPO last week.
Founder, the Chinese partner of Credit Suisse
, has gained nearly 19 percent since going public in
August with a $910 million IPO.
Hong Kong, the world's busiest IPO market for the past two
years, has seen a year-end rush for deals after the euro zone
debt crisis virtually shut the IPO market in the second-half. At
least five more Hong Kong deals totalling about $1.5 billion are
slated to be priced before the year-end, according to IFR
estimates. Haitong's decision to postone its offer could cast a
doubt over the fate of some deals, bankers said.
Among the upcoming deals, Guodian Technology and Environment
Group, a maker of wind equipment, will price its up to $643
million IPO on Wednesday, while windfarm developer Beijing
Jingneng Clean Energy is slated to price a $300 million offering
on Thursday. The IPOs will be no easy sell, given the plunge in
clean technology companies, investors said.
China Tianrui Group Cement Company Ltd, which was set to
start on Monday a roadshow for its up to $300 million IPO, also
pulled its offering, a company spokeswoman said on Monday.
Amid waning investor appetite, IPO issuance in Asia ex-Japan
has more than halved this year to $72.4 billion, according to
Thomson Reuters data.
Haitong's decision comes after three offerings totalling
$4.3 billion in Hong Kong and Shanghai were priced at the
low-end of expectations, indicating weak investor demand for the
Haitong's offer was backed by global private equity firm
Warburg Pincus, which had committed $210 million to the offer.
It is rare for large IPOs backed by cornerstone investors to be
pulled, although in September, China's largest construction
machinery maker, Sany Industry Co Ltd, dropped its
$3.3 billion offering.
Haitong was aiming to sell 1.229 billion new shares
at between HK$9.38-10.58 each.
Haitong's Shanghai-listed shares closed 0.6 percent lower.
Founded in 1988 as Shanghai Haitong Securities Co, the firm
has 210 branches in 113 cities in mainland China, with 13 more
in Hong Kong and Macau and more than 4 million retail brokerage
Citigroup Inc, Credit Suisse AG, Deutsche
Bank, JPMorgan and Haitong's own Haitong
International acted as joint global coordinators on the
offering. HSBC Holdings Plc , Nomura, Standard
Chartered Plc and UBS AG were also hired as