HONG KONG: Hui Xian REIT, the property flagship controlled by Hong Kong billionaire Li Ka-shing, has secured regulatory clearance to launch Hong Kong's first yuan-denominated stock offering, IFR reported late on Friday.
Following the long-awaited nod from the Securities and Futures Commission (SFC), the joint bookrunners BOC International , Citic Securities and HSBC Holdings will start premarketing the initial public offering (IPO) next week, IFR, a Thomson Reuters publication, reported, citing sources familiar with the matter.
Hui Xian real estate investment trust comprises the Oriental Plaza in Beijing, which is mainly owned by Cheung Kong (Holdings) Ltd , the property company controlled by Hong Kong tycoon Li Ka-shing.
Li is planning to spin off the rental properties, aiming to raise about 10 billion yuan ($1.5 billion), sources previously told Reuters.
A successful listing of Hui Xian REIT may encourage other Hong Kong developers to launch similar products to tap into the bulging yuan deposits in Hong Kong.
The REIT is expected to offer 4 percent yield, some analysts estimate, making the IPO attractive to investors looking to higher return on their yuan deposits in Hong Kong and also allowing them to bet on appreciation in Chinese currency.
At the end of February, yuan deposits in Hong Kong totalled 407.7 billion yuan ($62.2 billion), more than quadrupling from a year earlier. Such deposits only earn a few basis points in interest income while yuan denominated bonds yield between 1-3 percent.
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