On Thursday of last week, China's benchmark Shanghai Composite found its way back into a technical bull market, rising more than 20 percent from its low on August 26. This cheered the battered market, which went into a free-fall in mid-June despite an array of unprecedented measures by mainland regulators, including direct share purchases by state entities and a freeze on IPOs.
CICC, established in 1995 as a joint venture between China Construction Bank, Singapore sovereign wealth fund GIC Ltd. and Morgan Stanley, plans to use the funds to expand its equity sales and trading and wealth management businesses as well as its international subsidiaries.
The long-awaited IPO was originally planned for the third quarter, but was delayed due to the turmoil in the mainland's financial markets. The Chinese investment bank, which counts global private equity firms KKR & Co. and TPG Capital Management among its shareholders, also slashed its IPO size from $1 billion.
"Market sentiment wasn't that great earlier on. Investors were cautious, especially given that there were two big IPOs earlier on, so the lowering of IPO prices can improve investor interest. And I think the strategy has been successful," Partners Capital International's Wan said.
CICC's market debut marked the latest in a series of large floats in Hong Kong, including reinsurer China Re and "bad bank" China Huarong Asset Management. Both listed in October, raising a combined $4.3 billion.
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For Eastspring Investments, these listings bode well for China's financial sector.
"CICC's IPO, coupled with the recent listings of China Re and China Huarong Asset Management, has brought back some positive sentiment to the financial sector, especially since focus in the past few months has been more on Chinese I.T. stocks given the upcoming MSCI inclusions of the ADRs," Asia equity portfolio specialist Ken Wong said. The American Depositary Receipts (ADRs) of some of China's tech giants, such as Alibaba, are expected to be included in the benchmark index in the next review.
Hong Kong-listed mainland brokers outperformed on Monday, with Citic Securities, China Galaxy Securities and Haitong Securities up between 0.6 and 1.6 percent.
— Reuters contributed to this report.