As Hong Kong’s
IPO activities have come back to life, few companies making their stock debut better mirror the market’s ups and downs in the past few years than
FWD Group. The pan-Asian insurer founded by local tycoon Richard Li Tzar-kai has reached the end of a four-year journey after selling 91.3 million shares with a market capitalisation of HK$48.8 billion (US$6.2 billion). The home-grown firm’s high-profile debut stood out amid a slew of initial public offerings by companies from the mainland.
The odyssey has taken it to
New York and back, followed by delays because of the Covid-19 pandemic and a slumping local market. However, that may have been a blessing in disguise given its successful initial public offering this week.
FWD first hit a roadblock in 2021, when the political and regulatory environments turned against mainland and Hong Kong firms hoping to list in the United States. Washington politicians in favour of financial decoupling
threatened to delist Chinese firms from US exchanges. US regulators raised questions about potential risks associated with Beijing extending control over Hong Kong firms.
When Li decided to list at home, Hong Kong was in the middle of a pandemic. That and a slowdown in the Chinese economy mired the capital market, with FWD having to postpone its local IPO several times. But fortune changed with a rerating of the city’s capital market early this year, which helped buoy valuations and led to the return of global investment and IPOs.
Hong Kong has
reclaimed the international IPO crown, with 42 mostly mainland companies having raised US$13.5 billion on the Hong Kong stock exchange in the first half of this year. The Nasdaq ranked a distant second with US$8.85 billion raised.
Supportive policies on both sides of the border help excite IPO interest. Officials from the Hong Kong Monetary Authority and the government have been working to expand financial connections across Asia and the Middle East. One of FWD’s cornerstone investors is Mubadala Capital, a unit of Abu Dhabi’s sovereign wealth fund.
