China to close loophole used by tech firms for IPOs
MAINLAND CHINA & HONG KONG
Weibo Corporation (9898 HK) and its shareholder Sina Corporation (SINA US) priced shares in the Twitter (TWTR US) -like website’s Hong Kong second listing at HKD272.80 each, raising about HKD3b (USD385m) despite Beijing’s latest market-dampening regulatory moves.
The price represents a discount of about 2.8% to Wednesday’s USD36 close in New York.
The Chinese social media company sold 5.5m new shares in the Hong Kong offering, while Sina sold 5.5m existing shares. The sellers set a maximum price of HKD388 for the portion of the deal being marketed to Hong Kong’s retail investors.
Weibo’s Hong Kong listing comes as Chinese regulators continue their relentless tightening of oversight on local firms traded overseas. China will issue new draft rules as soon as this month restricting the use of so-called variable interest entities (VIEs), Bloomberg News reported Wednesday. The rules would ban VIEs’ use in new listings aside from in Hong Kong and would require more transparency from firms that already use the structure.
Weibo’s American depositary receipts plunged 9.6% during Wednesday (2 December) trading in New York, their biggest fall since late August. They have lost more than 30% of their market value since early July, when a cybersecurity probe of Didi Global Inc (DIDI US) kicked off a round of moves that wiped about a trillion dollars off Chinese companies globally. – Bloomberg News.
The Shanghai Composite Index dipped 0.01% to 3,573.84 while the Hang Seng Index climbed 0.55% to 23,788.93.
REST OF ASIA
Grab Holdings Ltd (GRAB US), Southeast Asia’s biggest ride hailing and delivery company, fell sharply in its first day of trading after completing its merger with Altimeter Growth Corporation (AC US), the largest deal yet for a special purpose acquisition company (SPAC).
The shares slid 21% to USD8.67 at 1:30 pm in New York.
Grab has yet to prove it can reach profitability, especially with the resurgence of Covid. In September, the company cut its revenue projections for 2021 as Southeast Asia battled with the delta variant. In November, the company said its net loss widened to USD988m for the third quarter, while revenue declined 9% to USD157m.
Grab is facing growing competition in the region, including from Sea (SE US). Still, Grab has a leading position in the market and it raised more than USD4b in additional capital as part of the SPAC deal. – Bloomberg News.
Australia’s S&P/ASX 200 Index climbed 0.15% to 7,236.00 early-Friday morning, reversing to its previous loss of 0.15% to 7,225.20.
South Korea’s Kospi Index slipped 0.45% to 2,932.08 in early Friday trading. It climbed 1.57% to 2,945.27 the previous session.The Taiwan Stock Exchange Weighted Index rose 0.79% to 17,724.88.
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