Hong Kong Block Trade Bonanza Raises $1.8 Billion in One Day

(Bloomberg) — Issuers took advantage of Asian shares hitting fresh records Monday to sell $1.8 billion of stock in five block trades, a New Year frenzy highlighting bullish sentiment.

The flurry of share sales came in a narrow window before the Georgia Senate runoffs in the U.S. Jan. 5, which could prolong the uncertainty from the 2020 presidential election. U.S. stocks slipped Monday as investors fretted about the country’s shaky economic recovery following a surge in coronavirus cases.

The parent of Chinese pharmaceutical company Wuxi Biologics Cayman Inc., a familiar presence in Hong Kong’s equity capital markets, raised $1.3 billion in a placement, selling 20 million additional shares of the biotech company. Warburg Pincus fetched $188 million from the sale of mainland vitro fertilization service provider Jinxin Fertility Group Ltd. shares, which was also upsized.

“Definitely lots of bullish sentiment swiveling in the market right now, particularly when it comes to the Chinese market with the interest to hunt for returns at the start of the year,” said Jingyi Pan, market strategist at IG Asia Pte.

Shareholders sold stakes Monday in three other companies in Hong Kong: Hygeia Healthcare Holdings Co., China East Education Holdings and Kingboard Laminates Holdings Ltd.

Tuesday’s runoff in Georgia will determine whether Democrats have control of Congress with the ability to advance President-elect Joe Biden’s agenda. But much like the November election, the results are likely to be delayed for days or even weeks. Deal activity slowed during the U.S. election last year as investors held off on big bets.

Apart from buoyant markets, the short window before the Lunar New Year holiday is also spurring the boom in share sales. January is often a busy time for additional equity sales in Hong Kong as the holiday tends to make the period too short to carry out initial public offerings.

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