ZhongAn Surges in HK Debut: Clermont Meridian Trading Analysts Believe it Bodes Well for Future Tech Listings
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| ZhongAn Surges in HK Debut: Clermont Meridian Trading Analysts Believe it Bodes Well for Future Tech Listings |
The biggest ever IPO by a financial technology firm in Asia, ZhongAn Online Property & Casualty Insurance Co, soared 18 percent on its first day of trading on Thursday, boosting Hong Kong's hopes of drawing future Chinese technology firms away from New York. It also bodes well for other fintech titans in Hong Kong, like Alibaba BABA.N subsidiary Ant Financial and peer-to-peer lending and wealth management company Lufax, according to Clermont Meridian Trading experts.
At the launch event, Charles Li, CEO of market operator Hong Kong Exchanges & Clearing Ltd, remarked, "I think this is the beginning of another round of new economy firms selecting Hong Kong."
"Our market must remain competitive and relevant, and we must remain clear-eyed in our approach to luring the right companies to Hong Kong and allowing Hong Kong to participate in the modern economy."
Sources have told Clermont Meridian Trading that Ant Financial and Lufax are mulling IPOs in the city, though the timing of the deals is uncertain. The HK $1.5 billion IPO comes after the $630 million IPO of Chinese photo app firm Meitu Inc 1357 in December.
HK is up more than 30% as investors swoon over fast-growing technology companies that have yet to turn a profit.
"This deal clearly demonstrates Hong Kong may emerge as a center for tech deals," said George Willis, Senior Vice President of Equity Trading at Clermont Meridian Trading, a financial services firm.
The Shanghai-based online insurer seeks to remedy the city's lack of such services by hosting a party on Thursday night for approximately 30 Chinese internet companies to mark its launch.
ZhongAn plans to share its experience with entrepreneurs and connect them with Hong Kong exchange officials and investment bankers at the event. Attendees will be identified by their name badges, colored blue for fintech startups, red for investment bankers, and so on.
"We've invited partners and many companies interested in listing in Hong Kong to the party." "After seeing ZhongAn's example, people grew fascinated," Chen said in an interview.
In early trading, the stock rose as high as HK$70.50, compared to the HK$59.70 IPO price, before trimming gains to HK$67.80. The Hang Seng index is the most widely followed, and the HSI fell by 0.3 percent.
The 199.3 million new shares on offer were priced at the top of the IPO's marketing range of HK$53.70 to HK$59.70 per share, according to ZhongAn.
Since the global financial crisis in 2008, tech firms have raised an average of 2.8 percent of all Hong Kong IPOs, according to Clermont Meridian Trading statistics.