langweilig wird, noch etwas zu China Moly
China Molybdenum Raises $943 Million in Hong Kong IPO
(Bloomberg)
Updated: 2007-04-19 13:54
Counter:4
China Molybdenum Co. raised HK$7.37 billion ($943 million) in a Hong Kong initial share sale, becoming the world\'s biggest publicly held producer of the steel ingredient, two people with direct knowledge of the matter said.
The company sold 1.084 billion new shares, a 22.7 percent stake, at HK$6.80, said the people, declining to be identified before an announcement. Individual investors ordered about 400 times the stock on offer, enabling the sale\'s arrangers to raise the top end of the price range from HK$6.40.
Investors are piling into Chinese initial public offerings to tap annual economic growth of more than 10 percent. Government attempts to cool demand for commodities used in construction and manufacturing have been largely ineffectual, with stainless steel output forecast to grow 37 percent this year.
"Resources stocks have been quite hot over the last few months," said Kenny Tang, associate director of research at Tung Tai Securities Ltd. in Hong Kong. "The valuation is not very high and the market thinks there should be more upside to the company after the listing."
Morgan Stanley and UBS AG arranged the sale.
Nick Footitt, a Morgan Stanley spokesman in Hong Kong, and Chris Cockerill for UBS in Hong Kong, declined to comment. An official in China Moly\'s Luanchuan, Henan province head office, who refused to give his name, also declined to comment.
China Moly plans to boost production of the metal, used to harden steel, as demand from makers of Chinese stainless steel pushes prices to records.
Rising Prices
The price in China of molybdenum concentrate, a semi- processed form of the metal, has climbed 16 percent this year, according to research company Metal Bulletin. World stainless steel production jumped 17 percent last year, the International Stainless Steel Forum said on its Web site.
China, the world\'s biggest producer of stainless steel, will probably increase output by 37 percent this year to 7.35 million metric tons, metals research firm Heinz H. Pariser said March 21.
Molybdenum accounts for 1 percent of the raw material used for stainless steel making, and 20 percent in terms of value because of its relatively high price.
Hong Kong individuals ordered almost 400 times the 108.4 million shares earmarked for them, the people said. Increased their share of the sale from 10 percent to 50 percent by exercising a so-called claw-back option.
Demand from international institutions covered the remaining shares, after deducting $160 million of stock reserved for corporate investors, by more than 200 times, they said.
History Lesson
"Recent history shows if you buy China IPOs, you will make money," said Andrew Clarke, a sales trader at SG Securities Hong Kong Ltd.
Chinese companies raised $41.8 billion from initial public share sales in Hong Kong since the beginning of last year, accounting for about 90 percent of all first-time public stock offerings in the city in the period, according to data compiled by Bloomberg.
Of the companies that went public on Hong Kong\'s main board last year, 49 percent gained at least 20 percent on the first day of trade, accounting firm PricewaterhouseCoopers LLP said.
Nine corporate investors including China Life Insurance Co., Citic Pacific Ltd., and Government of Singapore Investment Corp. bought a combined $160 million of shares.
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