Asia Pacific IPOs in busiest deal week since 2011

Asia Pacific IPOs in busiest deal week since 2011

HONG KONG/KUALA LUMPUR - 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 US$2.9 billion (S$3.62 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 US$1.8 billion in Hong Kong's biggest IPO in almost six months, one day after China Galaxy's US$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 US$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 US$600 million IPO by Langham Hospitality Investments and a US$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 US$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 Paulo's Bovespa.

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