[HONG KONG] One could be forgiven to question how a storm could delay one of the world’s biggest deals in a sophisticated financial centre like Hong Kong.
Well, it is looking increasingly likely that this is what will happen with Zijin Gold and its US$3.2 billion IPO, the world’s biggest deal of its kind since May, now that the No 8 typhoon signal – the third-highest storm warning – has been hoisted.
Though the company did not reply to requests for comment, Hong Kong exchange rules require companies to push back the entire IPO process, including the listing date, by at least one business day if a No 8 signal or above is in place between 9 am and noon on the final day for mom-and-pop investors to order shares.
With Super Typhoon Ragasa expected to be closest to Hong Kong early on Wednesday (Sep 24), the final day Zijin Gold had planned for retail subscriptions, it is unlikely for the warning level to be eased in time.
But isn’t that what the Internet is for?
Sure, Ragasa threatens to be the strongest storm to slam Hong Kong since 2018, but according to Andy Wong, IPO leader at the advisory firm SW Hong Kong, the reality is that companies need to let retail investors visit bank branches to place their orders in person. And people cannot do that easily during signal No 8, also known as T8, because public transportation becomes limited.
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Also, the last day of the IPO book-building process can be a painstaking endeavour that requires physical exchange of some papers between the banks handling investors’ money and share registrars, according to Frank Bi, head of the Asia corporate-transactions practice at the law firm Ashurst.
“There are still people running around to do the nitty gritties,” Bi said.
Remember, it was only until last year that Hong Kong ended its decades-long practice of halting the stock market during T8.
Two listings had already been postponed in 2025 to give extra time for retail investors to place their bids. This time around, Zijin and gold-case watchmaker Shenzhen Hipine are likely to delay their listings. If extreme weather persists through Thursday morning, automobile-software maker Pateo Connect would also risk delays.
The US$1.2 billion listing of Chinese carmaker Chery Automobile is still expected to go ahead on Thursday because the company has wrapped up taking investor orders.
It is not just IPOs. Some loan bankers said they have been rushing to physically sign paperwork to close deals before the end of the quarter, which could help with their league rankings, because of the disruptions from the storm. BLOOMBERG
