Top Glove shelves Hong Kong listing as Ukraine war roils markets

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A worker leaves a Top Glove factory after his shift in Klang, Malaysia December 7, 2020. REUTERS/Lim Huey Teng GLOBAL BUSINESS WEEK AHEAD

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SYDNEY/KUALA LUMPUR, March 8 (Reuters) - Malaysia's Top Glove Corp Bhd has postponed a plan to raise $347 million in a Hong Kong listing due to elevated market uncertainty after Russia's invasion of Ukraine, its managing director said on Tuesday, confirming an earlier Reuters report.

The manufacturer, which benefited from demand for disposable medical gloves during the COVID-19 pandemic, has a primary listing in Kuala Lumpur and secondary in Singapore, and had planned the Hong Kong listing to broaden its investor base.

"Due to the changing developments in the industry and the current equity market conditions, we have decided to give ourselves more time to pursue this exercise in Hong Kong," Lee Kim Meow told Reuters, referring to the impact of "Russian military action" on market sentiment.

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He said the world's largest medical glove maker was in no hurry to list as the plan was for the long-term benefit.

Top Glove's Kuala Lumpur-listed shares fell 6.3% after the news. The stock has fallen 31% in 2022.

The glove maker, which reports second-quarter earnings on Wednesday, initially aimed to raise $1 billion in what would have been a dual primary listing.

Shareholders in December approved the issuance of up to 793.5 million shares which at the current price of 1.83 ringgit would have raised about $347 million.

Top Glove had planned to launch the deal in February but postponed it because Russia's invasion of Ukraine has weighed on investor sentiment and heightened market volatility has impacted the listing progress, a person with direct knowledge of the matter told Reuters earlier, declining to be identified as the information was not yet public.

Russia calls its actions in Ukraine a "special operation".

SHARE SALE HALT

A growing number of Asian share sales are being put on hold as markets remain roiled by the invasion.

MSCI's broadest index of world shares (.MIWO00000PUS) has dropped 13% year-to-date, as geopolitical uncertainty causes investors to flee equities and pile into safer assets.

Chinese fast fashion retailer Shein postponed its U.S. listing ambitions due to the upheaval, Reuters previously reported. read more

Life Insurance Corp's plan to raise $8 billion before March-end in India's largest-ever initial public offering (IPO) is also now in doubt. read more

"The prospects of ever increasing sanctions on Russia, the ongoing crackdown on real estate, tech and other sectors in China, passing of the peak of loose monetary policy in the West and it all portends to a rather quiet period for equity capital market activity until the equity and commodity markets settle down," Sumeet Singh, Aequitas Research director who publishes on Smartkarma, told Reuters.

Hong Kong has recorded the slowest start to the year for IPOs and secondary listings in six years with $1.17 billion raised in 2022, Refinitiv data showed.

That compares with $10.16 billion in the same period of 2021 and the lowest since 2016.

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Reporting by Scott Murdoch in Sydney and Liz Lee in Kuala Lumpur; Editing by Sumeet Chatterjee and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia based in Hong Kong.