Nov. 30 (Bloomberg) -- Haitong Securities Co., China’s third-biggest brokerage by market value, may raise about HK$13 billion ($1.7 billion) by selling shares in Hong Kong, according to two people familiar with the matter.
The brokerage is offering 1.23 billion shares at HK$9.38 to HK$10.58 apiece, the people said, asking not to be identified because the process is private. Warburg Pincus LLC, the buyout firm based in New York, will purchase $210 million of shares in the IPO as a so-called cornerstone investor, according to the people.
Companies are planning to sell as much as $7 billion of new shares in Hong Kong by the end of the year, betting on a revival in investor appetite after the value of initial public offerings slumped almost 70 percent this year. Chow Tai Fook Jewellery Group Ltd., controlled by real-estate billionaire Cheng Yu-tung, is seeking to raise up to $2.8 billion.
“There will be appetite for China brokerages as the sector is going to expand with the development of new businesses such as asset management,” Xie Jiyong, an analyst at Capital Securities Corp. in Shanghai, said by telephone today. “Haitong Securities is among the top players in the market given its size and balanced business.”
Companies have raised $15.9 billion this year from Hong Kong IPOs, compared with $49.1 billion for the same period last year, according to data compiled by Bloomberg.
Chow Tai Fook Jewellery received bids for all the stock available to money managers in its first day of order taking, people with knowledge of the matter have said. New China Life Insurance Co., the state-backed insurer seeking as much as $2.3 billion in an IPO in Hong Kong and Shanghai, received enough orders to cover its institutional books for both listings, said two people with knowledge of the transaction.
Shares of Haitong Securities fell 2.19 percent to 8.02 yuan in Shanghai as of 11:29 a.m. local time, extending its decline this year to 17 percent. The brokerage’s third-quarter net income fell 46 percent to 493.8 million yuan ($78 million), according to a statement in October.