IPO sponsor fees hit new low as rivalry escalates

Equity capital market participants were stunned this week when a US bank, thought to be Morgan Stanley, offered to charge nothing to be a sponsor of China Tower’s $10bn Hong Kong IPO — a highly unusual move even by the city’s ultra-competitive standards. But the aggression was not unique, as most banks asked for token fees in the hope of winning the mandate.

  • By John Loh
  • 15 Jun 2017

The bids shine a light on the price undercutting that has intensified in Hong Kong in recent years. As jumbo-sized deals become rarer in Asia’s equity capital market, zero sponsor fees are the latest ace up the sleeve of banks looking to get ahead of rivals.

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2 CITIC Securities 21.52
3 China CITIC Bank Corp 9.93
4 China Merchants Bank Co 9.38
5 Industrial and Commercial Bank of China (ICBC) 7.73

Bookrunners of Asia-Pac (ex-Japan) ECM

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1 CITIC Securities 11,427.98 67 5.85%
2 Goldman Sachs 9,298.39 45 4.76%
3 UBS 9,294.44 70 4.76%
4 China Securities Co Ltd 9,276.15 41 4.75%
5 China International Capital Corp Ltd 9,131.08 44 4.68%

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1 HSBC 28,421.28 190 8.22%
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4 Bank of America Merrill Lynch 18,072.67 94 5.23%
5 Standard Chartered Bank 14,573.61 109 4.21%

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