* Sinopec Engineering raises $1.8 bln
* APPT raises $1.14 bln
* All three large IPOs this week priced near the bottom
By Elzio Barreto and Yantoultra Ngui
HONG KONG/KUALA LUMPUR, May 16 IPO markets in
Asia Pacific had their best week in two years after Chinese
refiner Sinopec Group's engineering unit and a Macquarie Group
Ltd-linked trust raised a combined $2.9 billion on Thursday.
This week's three large IPOs, including one from state-owned
China Galaxy Securities Co Ltd, all priced at the lower end of
their indicative price ranges as investors seek bargain-priced
deals and companies look for first-day pops on their debuts.
The unit of Sinopec Group, Asia's largest refiner, raised
$1.8 billion in Hong Kong's biggest IPO in almost six months,
one day after China Galaxy's $1.1 billion deal.
Asian Pay Television Trust (APTT), which owns TBC Group,
Taiwan's third-largest cable TV operator, tapped the market in
Singapore for $1.14 billion, in a deal that relied on investor
demand for high-yield securities such as business trusts and
real estate investment trusts (REITs).
"Ultimately the appeal for investors is the kind of yield
and what the management is doing to enhance the yield," said
Roger Tan, head of SIAS Research in Singapore.
The debuts of Sinopec Engineering, APTT and China Galaxy,
are set to be bellwethers for a slew of offerings in the works,
including an up to $600 million IPO by Langham Hospitality
Investments and a $1 billion offering by NW Hotel Investments,
which is part of New World Development.
Hong Kong, the top global IPO destination for two years
straight in 2009 and 2010, has lingered in 13th place in global
rankings so far this year behind countries like Iraq and New
Zealand, with $1.1 billion worth of deals before the two large
offerings by China Galaxy and Sinopec Engineering.
The two deals will vault Hong Kong to third among global
exchanges in IPO volumes as of mid-May, behind New York and Sao
Sinopec Engineering (Group) Co Ltd sold 1.33
billion new shares at HK$10.5 each, said IFR, a Thomson Reuters
The company launched the deal on May 6, with an indicative
range of HK$9.80 to HK$13.10 per share. On Wednesday it narrowed
the range to HK$10.50-11 per share.
Sinopec Engineering secured commitments for $350 million
worth of shares from seven investors including logistics and
transportation company China Shipping (Hong Kong) Holdings and
units of China Aerospace Science and Technology Corp.
The company plans to use most of the IPO proceeds to support
its engineering, procurement and construction (EPC) services
business and set up six research and development centers in
It is controlled by China Petrochemical Corp, the
state-owned integrated oil behemoth also known as Sinopec Group
which is also the parent of China Petroleum and Chemical Corp
Citic Securities , JPMorgan and
UBS were hired as sponsors of the offering, with
Goldman Sachs also acting as a joint global coordinator
on the deal. A group of nine other banks will also help manage
the IPO as joint bookrunners.
Asian Pay Television Trust has garnered some high-profile
cornerstone investors including Prudential's Eastspring
Investments, George Soros' Quantum Partners, Och-Ziff Capital
Management Group LLC and Neuberger Berman.
The two Macquarie funds that own TBC are selling most of
their holdings in the deal, reducing their combined ownership to
3 percent, according to the prospectus.
It is forecasting a yield of up to 7.3 percent for the year
ending December 2013 and 8.25 percent for 2014, the prospectus
Singapore could see at least two more large REIT listings in
the months ahead and a spate of smaller deals. Property firm
Overseas Union Enterprise (OUE) could raise $800
million in a listing of a hospitality real estate investment
trust, while Singapore Press Holdings plans to list a
property trust that could raise up to $1 billion.