Hong Kong's first renminbi IPO prices at the bottom

Retail demand for the new product is less enthusiastic than expected, but Hui Xian Reit still raises $1.6 billion in Hong Kong's largest IPO this year and marks yet another milestone in the development of an offshore renminbi market.
<div class="ArticleImageCaption" style="text-align: left;">
Hui Xian Reit offers investors an alternative to low-return bank accounts.(AFP)</div>
<div class="ArticleImageCaption" style="text-align: left;"> Hui Xian Reit offers investors an alternative to low-return bank accounts.(AFP)</div>

Hui Xian Real Estate Investment Trust yesterday fixed the price of its initial public offering at the bottom of the offering range for a total deal size of Rmb10.48 billion $1.6 billion and a 2011 dividend yield of 4.3%, and on Friday next week will become the first entity to list renminbi-denominated equity units on the Hong Kong stock exchange.

This is a significant step in terms of the continued development of the offshore renminbi market in Hong Kong, but the expected rush into the new product didn’t happen and, judging from the headlines in the local press, the IPO is not the triumphant event that it was painted out...

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