China’s CICC investment bank set to open up in HK debut

China’s oldest domestic investment bank launched its initial public offering in Hong Kong on Monday boosted by last week’s news that the Chinese government will resume IPOs on the mainland market.

CICC, China’s first joint-venture investment bank, raised US$810 million last month after it priced its IPO at the top of its HK$9.12 to HK$10.28 indicative price range.

As of 0150 GMT, CICC stock was trading at HK$11.28, a little lower than the day’s high of HK$11.38.

The rebound after August’s plunge indicates that capital outflow pressures are easing amid a rebound in China’s stocks and currency. The China Securities Regulatory Commission said investors will no longer need to freeze big sums of money for IPO subscriptions and instead can pay only after confirmation of share allocations.

But the return of the IPO market reflects a turnaround in Chinese equities.

This month, the iShares China Large Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) rose 1.8% and 2.1%, but the Deutsche X-Trackers Harvest CSI 300 China A-Shares Fund (ASHR) and the Market Vectors ChiNext Fund (CNXT) jumped 7% and 7.5%.

“The timing of the reopening had been a closely monitored exercise by the market”.

It counts global private equity firm KKR & Co and TPG Capital Management among its shareholders.

Underwriting IPOs and other equity deals account for about half of investment banks’ revenue in Asia, compared with 20 percent in the United States and 19 percent in Europe.