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Straits Times
05-08-2025
- Business
- Straits Times
Hong Kong's new listing rules seen as helping hot market to stay hot
The changes are designed to encourage more companies to list in Hong Kong, and to set aside enough shares for large institutional investors. HONG KONG – Hong Kong's changes to its listing rules are likely to pave the way for one of the world's hottest markets for initial public offerings (IPOs) to stay hot for longer. That's based on early reactions to the Aug 1 announcement by the local exchange, which handed incentives for big Chinese companies to list in Hong Kong by easing the minimum public float requirement, and ensured that institutional investors get the bulk of shares offered during hot listings. The rules go into effect this week. The changes are designed to encourage more companies – particularly those whose shares already trade in mainland China – to list in Hong Kong, and to set aside enough shares for large institutional investors. The idea is that the moves will help the city's listings markets, which is forecast to double to more than US$22 billion (S$28 billion) in 2025, prolong the rally and solidify its place as Asia's premier financial hub. 'This contributes to a healthier IPO market by promoting price stability and more accurate valuations – ultimately benefiting both the IPO landscape and the broader Hong Kong stock market,' said Kenny Ng, a strategist at China Everbright Securities International. 'While retail investors might appear to lose out due to reduced allotments, the reform also protects them from volatile pricing that can arise from excessive retail demand.' They also represent Hong Kong's latest efforts to bolster the city's standing as a listing destination. Prior to last week, it allowed some companies to file confidentially, and for big firms already listed on the mainland Chinese bourses, Hong Kong promised to speed up the process for listing applications to 30 days. That may not be the end of it. The exchange is conducting a two-month public consultation on whether to lower minimum float requirements for China-traded issuers further to 5 per cent after they are listed. That's after announcing on Aug 1 that their minimum percentage of shares required to be listed when going public in Hong Kong will drop to 10 per cent from 15 per cent. The key to making this work is to limit these benefits to large companies, according to Vincent Chan, a China strategist at Aletheia Capital. Top stories Swipe. Select. Stay informed. Singapore Singapore launches review of economic strategy to stay ahead of global shifts Singapore A look at the five committees reviewing Singapore's economic strategy Opinion Keeping it alive: How Chinese opera in Singapore is adapting to the age of TikTok Life Glamping in Mandai: Is a luxury stay at Colugo Camp worth the $550 price tag? Sport World Aquatics C'ships in S'pore deemed a success by athletes, fans and officials Singapore Strong S'pore-Australia ties underpinned by bonds that are continually renewed: President Tharman World Trump says he will 'substantially' raise tariffs on India over Russian oil purchases Low float requirements 'could pose a problem for smaller firms, as liquidity in the Hong Kong market could become so low that it becomes a concern,' Mr Chan said. 'If a company is large enough, the float requirement doesn't matter as much.' Retail fever The other big change in the exchange's rules involved Hong Kong's unusual system to ensure retail investors don't lose out on highly sought-after IPOs. In such deals, if demand from retail investors is high enough, it triggers a so-called clawback mechanism that increases the number of shares available to them by redistributing stock that had been allocated to institutional investors. The exchange lowered the maximum proportion of shares that can be allocated to retail investors to 35 per cent, down from 50 per cent currently. For retail investors, it could have been worse as the exchange had initially proposed to cut it to 20 per cent. The change aims to minimise the risk of IPOs being overpriced during bookbuilding, which can result in a greater risk of a price slump after listing, the exchange said in a December paper. The retail frenzy around the likes of Mixue Group's Hong Kong debut was so intense that the securities regulator put a cap on margin loans and launched a review of the brokers that were most active in the deals. Louis Wong, director of Phillip Securities (HK), a brokerage popular among retail investors that submitted comments with the exchange, said his firm's trading commissions will likely take a hit from lower allocations to retail investors. But the exchange has to strike a balance between the interests of retail and institutional investors, he said. New listings have fuelled Hong Kong's revival in 2025, driven by a slew of Chinese companies adding an extra listing in the city, including battery-giant Contemporary Amperex Technology's blockbuster deal – the biggest of its kind in 2025 globally. That helped the city reclaim its standing as the world's second-largest market for share sales for the first time since 2012, reversing a years-long slump following the Covid-19 pandemic. The trick now is to extend the streak. BLOOMBERG
Business Times
11-07-2025
- Business
- Business Times
GoTo shares are tipped for rebound after US$2.2 billion sell-off
[SINGAPORE] South-east Asia's worst-performing tech stock this year is poised to rebound as it makes strides towards sustained profits and its fintech business provides plenty of upside potential, analysts say. The beaten-down shares of Indonesia's GoTo Gojek Tokopedia fail to reflect its ongoing profitability turnaround, according to JPMorgan Chase and Aletheia Capital. The e-commerce firm's financial discipline and buybacks also point towards the prospect of an upward re-rating, SGMC Capital said. GoTo shares surged after going public in 2022 but then slid almost 90 per cent to their lows last year. The stock is down 14 per cent in 2025, the worst-performing tech company on the MSCI Asean Index, wiping out US$2.2 billion of market capitalisation in the process. 'Operationally, the company is on a sound footing,' said Nirgunan Tiruchelvam, head of consumer and Internet at Aletheia Capital in Singapore. 'It has done all the right things, but the market for some reason seems to have punished the stock.' GoTo, which was formed via a merger of ride-hailing and food-delivery platform Gojek and e-commerce firm Tokopedia in 2021, reported its third straight quarterly profit on an adjusted basis in April as it cut costs and boosted sales. Adjusted earnings before interest, taxes, depreciation and amortisation, known as Ebitda, climbed to 393 billion rupiah (S$31 million), versus a pro forma loss of 101 billion rupiah a year earlier. Net revenue jumped 37 per cent. One driver of the improvement has been GoTo's fintech business. The firm's digital wallet and lending unit saw revenue jump by 90 per cent year on year last quarter, with monthly transacting users rising to more than 20 million. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up GoTo's fintech 'scale and trajectory is just starting up' and will rival those of its competitors SEA and Grab Holdings in terms of momentum, said Mohit Mirpuri, a senior partner at SGMC Capital in Singapore. 'This could be the dark horse in South-east Asia's fintech race.' Merger talk Another source of upside for GoTo's shares is the potential merger with regional rival Grab. While Grab is weighing a takeover of GoTo at a valuation of more than US$7 billion, regulatory hurdles are considerable. Despite frequent denials, market chatter ratcheted up again last month when Grab's sale of convertible bonds fuelled speculation it was building up a warchest for the acquisition. GoTo's 'current share price seems to have priced in a no-merger scenario and ignores the ongoing profitability turnaround of the business', Henry Wibowo, head of Indonesia research at JPMorgan in Jakarta, wrote in a research note last month. 'GoTo's share price is attractive at the current level and the recent pullback presents a good buying opportunity.' 'Limited upside' Other analysts are more sceptical about any potential rally, especially after GoTo sold its Indonesian online shopping app to China's ByteDance in 2023. 'GoTo likely has a limited upside for now as it no longer has e-commerce business, and Grab is outgrowing it slightly,' said Kai Wang, a strategist at Morningstar in Hong Kong. Much may hinge on GoTo's second-quarter results due this month. Investors will be looking for signs of further growth in the company's fintech business, progress on cost cuts from its decision to use the cloud services of Alibaba Group Holding, and any developments in the potential merger with Grab. In the meantime, bulls are looking beyond the noise. 'I do believe there's room for a rebound even without a merger trigger, especially if the company continues to deliver on profitability, execution, and capital discipline,' SGMC Capital's Mirpuri said. 'The stock right now is caught between reality and rumour. I would just kind of strip out the headlines and focus on the business.' BLOOMBERG
Bloomberg
11-07-2025
- Business
- Bloomberg
GoTo Shares Are Tipped for Rebound After $2.2 Billion Selloff
Southeast Asia's worst-performing tech stock this year is poised to rebound as it makes strides toward sustained profits and its fintech business provides plenty of upside potential, analysts say. The beaten-down shares of Indonesia's PT GoTo Gojek Tokopedia fail to reflect its ongoing profitability turnaround, according to JPMorgan Chase & Co. and Aletheia Capital. The e-commerce firm's financial discipline and buybacks also point toward the prospect of an upward re-rating, SGMC Capital says.
CNA
18-06-2025
- Business
- CNA
CNA938 Rewind - Why Chinese brands are expanding in Indonesia
CNA938 Rewind Researchers at ISEAS-Yusof Ishak Institute say newcomer food and beverage brands from China are surging in some Southeast Asian markets like Indonesia. Andrea Heng and Susan Ng speak with Nirgunan Thiruchelvam, Head of Consumer and Internet, Aletheia Capital, to examine the appeal of the country and wider region, and how it fits into China's economic recovery story.
CNA
13-05-2025
- Business
- CNA
Securities daily average volume hits 5-year high in April for SGX
It was a bumper month for the Singapore Exchange (SGX) in April, with securities daily average volume hitting a five-year high. However, analysts say that for sustained growth, Singapore needs more informed investors who are able to tap into the full potential of SGX. Equity analyst Nirgunan Tiruchelvam, Head of Consumer and Internet at Aletheia Capital, tells CNA how the SGX will appeal to companies, adding that he foresees more IPOs to come despite recent delistings.
