China's XCMG to market $1.5 billion HK share offer from Sept 5

China's XCMG to market $1.5 billion HK share offer from Sept 5

Stock Market Predictions

HONG KONG (Global Markets) - XCMG Construction Machinery Co Ltd (000425.SZ) is slated to start pre-marketing on September 5 for an up to $1.5 billion planned share listing in Hong Kong, IFR reported on Friday.

The Shenzhen-listed company, which makes bulldozers, excavators and heavy trucks, secured approval from the listing committee at Hong Kong's stock exchange on Thursday, added IFR, a Thomson Global Markets publication.

The company joins rival Sany Heavy Industry Co Ltd (600031.SS) and about 12 other companies that have announced plans to raise about $11.7 billion in September from share sales in Hong Kong, the world's biggest IPO market for two years running. XCMG plans to offer 593 million shares.

China International Capital Corp (CICC) and Morgan Stanley (MS.N) were hired as joint global coordinators for the deal, with Credit Suisse Group AG (CSGN.VX), HSBC Holdings Plc (0005.HK)(HSBA.L), Macquarie Group Ltd (MQG.AX) and BNP Paribas SA (BNPP.PA) helping to manage the offering.

(Reporting by Jing Song; Writing by Elzio Barreto; Editing by Chris Lewis)

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China's XCMG delays $1.2 bln Hong Kong IPO: IFR

China's XCMG delays $1.2 bln Hong Kong IPO: IFR

Stock Market Predictions

HONG KONG (Global Markets) - China's XCMG Construction Machinery Co Ltd (000425.SZ) has postponed its planned $1.2 billion Hong Kong stock offering, IFR reported on Saturday, citing four sources with direct knowledge of the matter.

XCMG's decision came only a few days after bigger rival Sany Heavy Industry Co Ltd (600031.SS) pulled its $3.3 billion Hong Kong share offer due to market turmoil.

IFR did not indicate a reason for the delay. Bookbuilding of the offering was originally scheduled to start on September 26, the report said.

The original size of the IPO was $1.5 billion. XCMG recently added six more banks to the underwriting team, taking the total number of banks on the deal to 12, according to IFR.

ABC International, BOC International, BoCom International, Essence Securities, Goldman Sachs Group Inc (GS.N) and ICBC International will join BNP Paribas SA (BNPP.PA), China International Credit Corp, Credit Suisse Group AG (CSGN.VX), HSBC Holdings Plc (0005.HK)(HSBA.L), Macquarie Group Ltd (MQG.AX) and Morgan Stanley (MS.N) to arrange the float.

On Thursday, Sany Heavy delayed a planned up to $3.3 billion Hong Kong offering. Xiao Nan Guo Restaurants Holdings also decided to call off its $95 million Hong Kong IPO because of market volatility.

(Reporting by Fiona Lau; Writing by Leonora Walet; Editing by Sugita Katyal)

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Valuation worries drive Glencore below issue price

Valuation worries drive Glencore below issue price

Stock Market Predictions

LONDON (Global Markets) - Shares in commodities trading group Glencore fell below their issue price of 530 pence on Friday, the second day of conditional trading, as investors fretted over its valuation.

The world's largest diversified commodities trader touched a low of 519 pence in unofficial grey market trade before closing at 524 pence, down 1.1 percent after more than 200 million shares changed hands, underperfoming a virtually flat FTSE index and a 0.4 percent dip in the broad mining sector.

The shares had closed on Thursday at 530 pence, exactly flat on a debut price in the middle of its indicated range, after a day of heavy volumes -- more than twice Friday's levels -- that made it one of the most traded stocks in the market.

"Basically, the valuation looks a little bit rich. They worked very hard to get a favorable price and one could argue the only reason it was up yesterday was support from the sponsoring banks," said analyst Nik Stanojevic at Brewin Dolphin.

"I think the market feels the same way. It wasn't as if they sold this thing really cheaply with the expectation it would go up 50 percent on the first day."

Unconditional trading begins on Tuesday in London, where Glencore's offer of up to $11 billion is set to be the largest listing on record, and Wednesday in Hong Kong.

Glencore, the world's largest diversified commodities trader, has said there was strong demand for its stock and it had enough buyers to cover its offering of up to $11 billion within hours of starting the sale process earlier this month.

But many investors have also expressed concern over the outlook for commodities, particularly after this month's sell-off, and fretted over the discounts that should be applied to take account of Glencore's conglomerate structure and of the fact it has operated away from the public eye for 37 years.

"Perhaps the fact that the float has, despite being over four times covered, been met with broad skepticism and sobriety is a sign of underlying health in the metals market?" analysts at Numis said in a morning note.

"The hopes for a 5-10 percent rally remain -- not exactly LinkedIn, but the first objective remains stability and garnering faith in this new currency."

Professional social networking site LinkedIn saw its shares more than double in their public trading debut on Thursday, a far cry from Glencore's more muted start.

At the offer price of 530 pence, Glencore has a market value of 36.7 billion pounds ($59.3 billion). It will be the fifth-largest mining-related company on the London exchange.

(Reporting by Clara Ferreira-Marques; Editing by Alexander Smith and Will Waterman)

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PetroChina shares jump on NDRC gas rise rumors

PetroChina shares jump on NDRC gas rise rumors

Stock Market Predictions

HONG KONG (Global Markets) - Oil major PetroChina (0857.HK) posted its biggest intraday percentage gain in eight months on Friday, surging more than 5 percent in Hong Kong on rumors that China may announce a natural gas price rise and a broker upgrade.

PetroChina (601857.SS), the country's largest oil and gas producer, has nearly half of its reserves in natural gas.

Analysts said the market was speculating that the National Development and Reform Commission may announce another domestic natural gas price hike, a move made more imminent by the collapse of talks between Russia and China to resolve an elusive 30-year gas supply deal on Friday.

"A much needed natural gas price hike would help PetroChina minimize the economic loss of importing expensive overseas gas," said Gordon Kwan, an analyst at Mirae Asset Securities in Hong Kong.

Merrill Lynch upgraded the Hong Kong listed stock to buy from neutral on Thursday, saying that PetroChina's parent CNPC may inject its oil assets in Sudan into the listed company.

Other analysts were more dubious on the Sudan asset injection happening in the near term given ongoing disputes between the country's Muslim North and Christian South over profit sharing.

PetroChina's shares were up 3.4 percent by 0715 GMT, strongly outperforming the benchmark Hang Seng Index's .HSI 0.9 percent drop.

(Reporting by Farah Master; Editing by Jonathan Hopfner)

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Prada's $2.1 billion IPO makes modest HK debut

Prada's $2.1 billion IPO makes modest HK debut

Stock Market Predictions

HONG KONG (Global Markets) - Italian fashion house Prada SpA (1913.HK) posted slim gains in its $2.14 billion IPO debut in Hong Kong, defying expectations for a weak start as investors who couldn't buy into the IPO snapped up the stock in a buoyant market.

The Milan-based company is the second to post first-day gains among the billion dollar-plus IPOs in Hong Kong this year, after MGM China (2282.HK), which rose a tepid 1.8 percent.

Many other global brands are exploring options to list in Hong Kong and Prada's performance is critical in attracting such companies to the world's hottest IPO market.

"It may give an idea to other potential brands listing not to price issues too aggressively," said Conita Hung, head of equity research of Delta Asia Financial.

"Consumers are willing to pay a very high premium chasing after brands, but it's not the case for investors. Investors are concerned about reasonable valuation and pricing."

Prada shares closed 0.3 percent higher at HK$39.60 on Friday, after trading as high as HK$40 earlier in the session.

The maker of luxury bags and Miu Miu dresses priced its $2.14 billion initial public offering at HK$39.50 a share, the bottom of a revised indicative range.

Prada's small gain surprised some analysts who attributed this in part to Friday's 1.9 percent rise in the benchmark Hang Seng Index .HSI.

Both commodities trader Glencore (0805.HK) and luggage maker Samsonite International SA (1910.HK) fell on their first day.

Some of the demand for Prada shares on Friday came from fund managers who didn't participate in the IPO, also helping lift the stock.

Prada's IPO received bids for just half the shares on offer for Hong Kong retail investors, compared with more than 2,000 times oversubscription for the IPO of handbag retailer Milan Station Holdings Ltd (1150.HK), the most popular offering in 2011.

Samsonite had demand worth 1.23 times the volume of shares on offer.

'NEW WAVE'

The move by consumer-focused companies such as Prada to list in Hong Kong is part of a trend to raise brand awareness in China, the world's fastest growing luxury market.

"We're opening a new wave for the luxury goods sector," Chief Executive Patrizio Bertelli said at a ceremony at the Hong Kong stock exchange.

Bertelli handed a glass-encased, bright-red Prada leather handbag during the traditional ceremony at the exchange, receiving a glass bull from Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd (HKEx) (0388.HK).

"We're positive that the greater China region is going to be one of the most interesting prospects in the luxury industry," Bertelli said, adding that the first listing of an Italian company was "a landmark" for the exchange.

Prada had originally set an indicative price range of HK$36.50 to HK$48 per share, before narrowing it to between HK$39.50 and HK$42.25 each last Thursday.

Prada and shareholders Prada Holding BV and Intesa Sanpaolo SpA (ISP.MI) sold 423.3 million shares in the offering, raising HK$16.72 billion ($2.14 billion).

In a statement on Friday, Intesa said its net income will be boosted by 255 million euros ($365.3 million) from the Prada stake stale. The bank slashed its stake in Prada to 1 percent from 5 percent.

In Italy, luxury leather goods maker Salvatore Ferragamo SpA priced its Milan initial public offering on Thursday at 9 euros a share.

Prada, set up in 1913 by Mario Prada as a business selling leather bags, trunks and silverware to the European elite, has become a global fashion empire, with 319 directly operated stores, a third of which are in Asia-Pacific.

The company received tepid demand from retail investors for its IPO as potential buyers were put off by having to pay Italian capital gains tax.

That, coupled with choppy equity markets, had led Prada shares to fall in grey market trading. Phillip Securities Group said in a report on Thursday night that the stock had fallen 2.9 percent to HK$38.35, pointing to a weak start on Friday.

The IPO valued Prada at about $13 billion, compared with the nearly $80 billion market capitalization of LVMH (LVMH.PA), $28.5 billion for Hermes International SCA (HRMS.PA) and $21 billion for PPR SA (PRTP.PA).

At the revised guidance, Prada would trade at a price to-earnings ratio of 22.8-24.4 times, more in line with global rivals.

(Additional reporting by Donny Kwok; Editing by Chris Lewis and Vinu Pilakkott)

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