Cornerstones weigh down Hong Kong IPOs

Cornerstone investors are painted as the foundation of solid growth but their track record on Hong Kong IPOs suggests they weigh down stock prices.

Rising wealth in China has undoubtedly had a positive influence on capital markets but data shows that the way some of those riches are harnessed in cornerstone investments is damaging the aftermarket performance of listed companies in Hong Kong.

Issuers with significant Chinese cornerstone backing large investors brought on board before the launch of an IPO have performed poorly compared to those with cornerstone support from global institutions such as BlackRock or Fidelity. 

Market participants say this is due to a combination of factors, and primarily stems from the quality of the issuers looking to list with Chinese cornerstone support.

...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222