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MORRISON & FOERSTER DELIVERS FIRST THREE HONG KONG IPOS OF 2014 AS MARKET REBOUND GATHERS STEAM

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Ven Tan

Taking the fore in Hong Kong’s continuing market rally, Morrison & Foerster this week completed the first three IPOs of 2014 on the Hong Kong Stock Exchange. The trio of offerings, worth an aggregate of nearly HK$1.32 billion, is strong evidence that the surge in Hong Kong financial market activity that began in the fourth quarter of last year will continue into 2014.

Ven Tan

Ven Tan

“The Hong Kong Stock Exchange is off to a strong start and well could be on the verge of an extraordinary year,” said Ven Tan, Managing Partner of Morrison & Foerster’s Hong Kong office and one of Asia’s leading capital markets lawyers. As the first three deals of 2014 suggest, our team, with its long track record of successful offerings and deep bench of capital markets talent, is well-positioned for what we see from our current pipelines of new deals as an accelerating market surge.”

Mr. Tan was lead counsel on two of the first three offerings of 2014. He represented longstanding firm clients CCB International Capital Limited (CCBI) and Bank of China International (BOCI) in the HK$432 million IPO by menswear apparel company Fujian Nouqi, the first listing of 2014, on January 9, and he also represented CCBI and China Galaxy Securities in the HK$420 million IPO of Miko International Holdings, a retailer of children’s apparel, which listed on January 15 and was more than 1,000 times oversubscribed, making it one of the most heavily subscribed IPOs in the history of the Hong Kong Stock Exchange. Morrison & Foerster Hong Kong partner Gregory Wang led the third IPO, representing another firm client BOCOM International Securities Limited (BOCOM) in the HK$470 million IPO by nutritional supplement maker Nanjing Sinolife United, which also listed on January 15.

Companies raised US$21 billion from IPOs in Hong Kong in 2013, up from US$11.5 billion in 2012, putting the Hong Kong Stock Exchange in second place behind the New York Stock Exchange in IPO volume for the year, according to The Wall Street Journal. This is the second year in a row that Morrison & Foerster has been first out of the IPO gate in Hong Kong. The firm, which last year celebrated its 30th anniversary in Hong Kong and has one of the strongest and most successful capital markets practices of any firm in the region, represented Golden Wheel Tiandi in the first major Hong Kong IPO in 2013, raising HK$760 million. In 2013, the firm also represented BOCI, HSBC, BNP and UBS in the RMB600 million high yield bond deal by Golden Wheel Tiandi; CICC, Morgan Stanley and UBS in the US$515 million secondary offering by H share listed Sinopharm, Bank of America Merrill Lynch, Deutsche Bank and BOCI as placing agents for Evergrande Real Estate’s HK$3.45 billion top-up placement; and China Zhengtong Auto in its US$335 million credit enhanced bond offering, China’s first offshore credit enhanced bond offering by a private sector  issuer with a standby letter of credit support from Bank of China, which is expected to open the market for private sector Chinese companies looking to the international bond market.

Morrison & Foerster is recognized as a leading firm across Asia by the most respected industry guides. We are consistently ranked as a leading capital markets practice in Hong Kong and China by all leading ranking publications Chambers Asia, IFLR and Asia-Pacific Legal 500. Chambers Asia also rates our China M&A practice among the nation’s “Elite,” and our pre-eminent technology transactions practice is recognized by Asia-Pacific Legal 500 in the top tier for Technology, Media and Telecommunications for both Hong Kong and China.

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Sterling holds above $1.39, rises vs euro after Sunak’s generous budget

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Sterling holds above $1.39, rises vs euro after Sunak's generous budget 1

By Joice Alves

LONDON (Reuters) – Sterling held above $1.39 against the dollar on Thursday and gained versus the euro after British finance minister Rishi Sunak unveiled an expansive annual budget designed to prop up the economy.

Sterling is the best-performing G10 currency this year, with investors expecting Britain’s speedy vaccination programme will help the economy to recover from its worst annual contraction in 300 years.

As the locked-down country prepares to re-open, Sunak delivered what he hopes will be a last big spending splurge to get the economy through the COVID-19 crisis.

The UK economy will return to its pre-pandemic size in mid-2022, six months earlier than previously forecast, Sunak said.

ING analysts said in a note to clients that the “generous budget” was well received and it was seen “to strike the right balance and support the spring recovery.”

Sterling edged 0.2% lower against the dollar to $1.3921 in early London trading,. Versus the euro, it gained 0.1% to 86.41 pence.

“Sterling is performing well …My sense is the budget measures bode well in the eyes of overseas investors,” said Neil Jones, Head of FX Sales at Mizuho Bank.

He said the measures and progress on vaccinations “add weight to the view the UK will stand at the forefront of the global COVID recovery”.

(Reporting by Joice Alves; editing by John Stonestreet)

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FTSE 100 falls as high yields, inflation worries return to fore

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FTSE 100 falls as high yields, inflation worries return to fore 2

(Reuters) – London’s FTSE 100 fell on Thursday, dragged by miners and bank stocks on concerns about rising bond yields and volatility in U.S. markets, while engineering company Meggitt fell after its annual profit halved due to the COVID-19 pandemic.

The blue-chip FTSE 100 index slid 0.5%, with mining stocks, including Rio Tinto, Anglo American, and BHP, leading the declines.

Resurgent worries about rising U.S. bond yields hit global shares as investors waited to see if Federal Reserve Chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs. [MKTS/GLOB]

Meanwhile, Bank of England policymaker Silvana Tenreyro said there was no good evidence that cutting interest rates below zero would, past a certain point, weaken Britain’s economy rather than boost it.

The domestically focused mid-cap FTSE 250 index fell 0.5%.

Ladbrokes owner Entain fell 2.0% after it held back declaring a dividend despite reporting a jump in 2020 earnings. It also said it was expecting online volumes to ease when shops re-open after surging during lockdowns.

(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V)

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World’s biggest wealth fund puts Japan’s Kirin on watch list over Myanmar link

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World's biggest wealth fund puts Japan's Kirin on watch list over Myanmar link 3

By Terje Solsvik

OSLO (Reuters) – The Norwegian central bank said on Wednesday it had put Japan’s Kirin Holdings Ltd Co on a watch list for possible exclusion from its $1.3 trillion sovereign wealth fund over the beverage giant’s business ties to Myanmar’s military.

Kirin on Feb. 5 said it would end its partnership with Myanma Economic Holdings Public Company Limited (MEHPCL), a company run by Myanmar’s army, after a military coup deposed the democratically elected government.

As part of its decision on whether to maintain its ownership in Kirin, the Norwegian fund will monitor the implementation of the company’s plan to end the ties, Norway’s central bank said in a statement.

Kirin’s decision effectively scraps the Myanmar Brewery joint venture, in which the Japanese firm’s controlling stake was valued at up to $1.7 billion, although Kirin also said it still wanted to keep selling beer in Myanmar.

Norges Bank Investment Management (NBIM), which manages the world’s largest sovereign wealth fund, held a 1.29% stake in Kirin Holdings at the end of 2020 with a value of $277.1 million.

“We remain focused on urgently implementing the termination of our joint-venture partnership with MEHPCL,” Kirin said in an emailed statement to Reuters.

“As part of this, we hope to find a way forward that will allow Kirin to continue to contribute positively to Myanmar. We value opinions and feedback from all of our stakeholders and are open to constructive engagement on this matter,” it added.

The Norwegian sovereign fund, formally called the Government Pension Fund Global and set up in 1996 to save petroleum revenues for future generations, owns about 1.5% of all globally listed shares.

Holding stakes in around 9,100 companies worldwide, it has set the pace on a host of issues in the environmental, social and corporate governance (ESG) field, and its decisions are often followed by other investors.

The bank separately said it would allow the wealth fund to invest again in Poland’s Atal SA, which had been excluded since 2017 for risk of human rights violations through its use of North Korean workers at Polish construction sites.

“As a result of a resolution in the United Nations Security Council, all North Korean workers have now been sent out of Poland. Therefore, there are no longer grounds for excluding the company,” Norges Bank said.

Atal did not immediately respond to an email seeking comment.

A third firm, Germany’s Thyssenkrupp AG, will be the subject of an “active ownership” process as the fund’s management seeks to probe the company’s anti-corruption work, Norges bank said.

“Norges Bank has been in dialogue with the company over a long period of time. We therefore have a good foundation for active ownership on the issues to which this matter relates,” the central bank said.

The fund held a 1.3% stake in the German firm at the end of 2020 valued at $147.1 million.

Thyssenkrupp did not immediately respond to an email seeking comment.

(Editing by Gwladys Fouche, Richard Pullin and Gerry Doyle)

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