Bluestar Adisseo Nutrition Group and China Datang Corp. delayed initial public offerings in Hong Kong seeking as much as $2.6 billion because of market volatility, according to three people familiar with the plans.
Bluestar Adisseo, the animal-nutrition producer backed by Blackstone Group LP, won’t list shares on Nov. 30 and delayed pricing plans today, said a person who declined to be identified because the information is confidential. Market conditions are affecting the valuation of China Datang Corp.’s renewable energy unit, said two of the people.
The IPOs would have added to the record $43.9 billion raised through offerings in Hong Kong this year, according to data compiled by Bloomberg that excludes overallotment options. The city’s benchmark Hang Seng Index slumped 8.3 percent from its high this year on Nov. 8 through to a six-week low yesterday amid concern China will step up measures to curb inflation and that Ireland’s debt crisis will spread in Europe.
“Since the market started to correct, investors started to think twice about IPOs,” said Alex Au, managing director of Richland Capital Management Ltd. in Hong Kong, which oversees $300 million of assets. “China tightening has been a big concern in the market, and Europe debt is certainly also a big macro event. It’s making people lower their risk appetite.”
IPOs have surged to a record in Hong Kong this year, led by Agricultural Bank of China Ltd. and AIA Group Ltd.’s sales, as investors sought stocks benefiting from Asia’s booming economies. AIA, an insurer that operates in 15 Asian markets, raised HK$159.1 billion ($20.5 billion) last month. Agricultural Bank, China’s fourth-largest by market value, raised HK$93.5 billion from the Hong Kong portion of its initial sale in July.
North Korea, Ireland
Stocks in the region declined today, dragging the MSCI Asia Pacific Index to a one-week low after North Korea shelled South Korea and Standard & Poor’s lowered Ireland’s credit rating.
The MSCI index has fallen 3.4 percent from a two-year high set on Nov. 8 amid speculation China will intensify efforts to curb inflation. Chinese policy makers last week boosted the amount of money that lenders must set aside for the fifth time this year.
The IPO delays won’t come “as any great surprise when we look at what’s happened in the markets in China over the past week or so,” Michael Parker, senior analyst at Sanford C. Bernstein & Co., said in Hong Kong.
China New Materials Holdings Ltd., a chemical maker in eastern China, canceled its IPO press conference today and has delayed its Hong Kong offering for at least two days, two people with knowledge of that sale. Calls to the company’s head office in Zibo city, Shandong province, weren’t answered.
No new timetable has been set for Adisseo, based in Antony, France, to price its stock, the person familiar with the company’s IPO said. The company had been seeking about $1.56 billion in its IPO, according to its IPO prospectus. Enquiries to the company’s Singapore office were referred to the head office in France, where calls went unanswered.
Blackstone, the world’s largest private-equity company, has a 20 percent stake in China National Bluestar Group Corp., which owns Bluestar Adisseo, according to the company’s IPO prospectus.
China Datang, the nation’s second-largest power producer, had sought about $1 billion from selling shares in China Datang Corp. Renewable Power Co. amid expectations demand for clean energy will increase in the nation.
Huang Yuan, head of the news office at China Datang Corp. in Beijing, didn’t answer calls.
The world’s fastest-growing major economy burns coal in about 80 percent of its power plants and wants at least 15 percent of its energy to come from renewable resources by 2020. About 17.5 percent of China Datang’s electricity generating capacity comes from clean energy sources, it said last December.
Declines in the markets have also affected debt issues. Hongkong Electric Holdings Ltd. delayed its dollar bond sale of as much as $500 million because of tension on the Korean peninsula, two people familiar with the matter said, at least the third Asian company to postpone sales this week.
“With the market coming off, investors are becoming more realistic,” said Richland Capital’s Au.
To contact the editor responsible for this story: Daniel Hauck at email@example.com.