TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Trading activity has been weak, with zero trades for some
Reuters
19 July 2011
Investors aren’t buying the string of companies listing in Hong Kong through a rare method involving a market debut without raising money.
The method is technically known as ‘listing by introduction’, though some use a different term.
‘Expensive marketing’, is what one investment banker called it.
Designed to raise a company’s profile among investors and provide a headstart for any future fundraising, the introduction listings have had limited success. Trading activity has been weak, with zero trades for a week in some cases.
Four companies listed in Hong Kong by way of introduction in the past three weeks alone, compared with seven for all of last year. US-based luxury group Coach Inc said it plans such a listing by the end of the year, while a local media report also put French banking group BNP Paribas as a candidate for an introduction listing.
Unlike typical IPOs, companies listing stock by introduction raise no capital and issue no new shares, which limits their appeal to investors.
Listing by introduction has become popular among companies looking to build a brand in Hong Kong and the rest of Greater China, where just about every major industry has seen massive growth during the last five years.
Having a traded stock allows them to boost their profile among investors and the public in Hong Kong, the region’s financial hub and the world’s busiest IPO market for the last two years. It also allows a company to establish a presence without the risks of flopping an IPO in a volatile market.
Since 2000, when Hong Kong Exchanges & Clearing itself listed by way of introduction, 48 companies took the same path. Last year alone, seven companies listed in Hong Kong by introduction, including Brazilian mining giant Vale .
‘The listing by introduction allows them to have a platform to raise money if they need to, without going through the IPO process again,’ said Kester Ng, head of equity capital and derivatives markets for Asia Pacific at JPMorgan, which sponsored the Vale listing. ‘Placements can be done more quickly.’
The pace has picked up, with four listings since late June, including handbag maker Lee & Man Handbags, Singapore-based shipping company Courage Marine Group Ltd and circuit board maker Elec & Eltek International.
London-listed mining company Kazakhmys Plc, which originally planned a US$200 million Hong Kong offering, opted instead for a listing by introduction because of a slump in global markets.
‘This listing will help raise our profile in the region’s major financial centre and will support the future development of our business by providing access to a much wider group of investors,’ Oleg Novachuk, chief executive of Kazakhmys, said in a statement last month.
For companies looking to increase their profile among Asian investors, a secondary listing or listing by introduction in Hong Kong could be less expensive than doing an IPO, but it doesn’t come cheap.
Vale spent US$11 million to list Hong Kong Depositary Receipts (HDRs) in December, while Prudential plc estimated costs of £5 million (S$9.8 million) for its listing last year.
More recently, Kazakhmys said its listing cost about US$10 million, while handbag maker Lee & Man Handbags spent HK$15 million (S$2.34 million).
Spending slightly more in fees than Vale, Prudential and Kazakhmys, Toronto-listed coal miner SouthGobi Energy Resources raised about US$390 million in a listing in Hong Kong last year that had Temasek Holdings and sovereign wealth fund China Investment Corp (CIC) as cornerstone investors. The company paid an estimated US$13.7 million in fees.
Brand awareness aside, if the listing generates little interest from investors, is the deal worth the time, energy and money spent?
‘Recent examples in Hong Kong show that it just doesn’t work,’ he added.
Given the thin volumes of Vale, Prudential and other companies, the listings haven’t drawn too many investors.
Trading in Prudential in Hong Kong dwindled to 4,500 shares on Friday from a daily average of 146,595 in its first month after listing last year.
Vale, among the most widely traded stocks in Brazil, had no trading for HDRs representing its preferred shares for seven straight sessions.
‘Because IPO volumes are much bigger in Hong Kong than anywhere else at the moment, people think that by getting a listing here they will be able to attract investors, but the reality is that without offering a substantial amount of stock to the market it’s just not going to achieve anything,’ Mr. Espinasse added.