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Monday, February 6, 2023

Hong Kong tycoon Richard Li’s FWD delays $1bn IPO on market volatility

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Insurance group FWD has delayed its $1bn Hong Kong preliminary public providing as a result of unstable market situations, in accordance with folks aware of the matter, the newest in a string of listings setbacks for the insurer based by property tycoon Li Ka-shing’s son.

FWD had sought a valuation of about $9bn and was solely lately permitted by Hong Kong’s inventory change to go forward with the share sale. The firm may resume itemizing procedures when markets develop into extra beneficial, in accordance with the folks.

FWD, which was based by Richard Li in 2013, utilized to checklist within the Asian monetary hub in February after its try to checklist on Wall Street got here beneath intense scrutiny from US regulators final yr.

“It’s definitely off the table for now,” one of many folks acquainted stated, including that whereas the corporate’s board had permitted the delay, “at the end of the day this was Richard’s decision”.

“There’s more at stake here than money,” the particular person stated. The newest IPO delay can be a lack of face for Li in his hometown however pushing forward would have risked the identical consequence if shares fell on their first buying and selling day.

The deferral can also be a blow for Hong Kong’s inventory change in a punishing yr for brand spanking new enterprise. IPOs within the metropolis raised simply $1.7bn within the first quarter, reflecting a 90 per cent drop from a yr in the past because the regular circulate of share gross sales from China dried up within the face of a crackdown on abroad listings and Russia’s invasion of Ukraine buffeted markets.

Markets in Hong Kong and better China have been hit laborious by rising uncertainty in current months as Covid-19 lockdowns within the mainland have threatened financial progress, pushing valuations decrease and taking town’s benchmark Hang Seng index down a couple of quarter from a yr in the past.

“Definitely this is not a good timing . . . for any kind of IPO,” stated Dickie Wong, government director of analysis at Kingston Securities.

“As we all know, most of the Chinese insurance companies are trading at almost close to historical low valuations amid concerns over new regulations in the mainland and also the investment sentiment.”

But the US Securities and Exchange Commission scrutinised the quickly increasing group over its ties with China, in accordance with folks aware of the matter. Political tensions in the end prompted it to withdraw its US listings software in December.

FWD, which has a restricted presence in mainland China, has targeted on snapping up the Asian companies of retreating rivals, constructing out operations throughout 10 markets together with Japan, Singapore, Vietnam and Malaysia.

Despite the newest delay, folks aware of Li’s considering stated he nonetheless deliberate to undergo with a Hong Kong itemizing, though there was no clear timeline for doing so.

“They’re expecting to go for it again, hopefully by the end of this year,” one particular person stated. “It’s just the market’s really, really bad.”

Source: www.ft.com

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