The SDIC Power IPO is seeking to raise between $500 million and $1 billion with the sale of Global Depositary Receipts on London Stock Exchange. A Global Depositary Receipt is a bank certificate which is issued in more than one country to purchase shares of foreign companies. 

The energy firm has a market value of $8.3 billion in Shanghai.  State-owned China Yangtze Power is SDIC Power’s second biggest shareholder with a 7.79 percent stake. 

Headquartered in Beijing, China Yangtze Power is a key player in hydropower market. It is also involved in alternate energy generation such as thermal, wind and photovoltaic energy projects. 

The Shanghai-London Stock Connect is one of the world’s largest domestic capital markets providing new opportunities for global investors to trade shares in Chinese companies. However, it is only open to blue-chip companies in each market. 

London Stock Exchange has described the market as a ‘milestone’ to club London and Shanghai markets. Chinese investors can purchase shares in London-listed companies. 

Chinese brokerage Huatai Securities was the first company to list in London under Stock Connect. British companies can also issue shares on the Shanghai Stock Exchange. 

The Stock Connect programme was started in 2015 and went live this year. The move is efficient as Britain is investing efforts to build ties with non-European countries to cover for the potential losses as a result of Brexit. 

The post China’s SDIC Power hires three banks as it prepares for $1 bn London IPO appeared first on International Finance.

Crude oil producers, oil refining firms, integrated oil and gas firms, offshore drillers, oil equipment and services, pipelines and also coal have been classified as non-renewable energy.

Similarly, producers of alternative fuels such as ethanol, methanol, hydrogen and biofuels and renewable energy equipment have all been grouped under renewable energy category.

Recently, Norway’s Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund decided to stop investing in oil and gas firms globally. The organisation undertook the largest fossil fuel divestment to date by pulling out more than $13 billion of investments in the coal and oil sector.

Many bilateral and multilateral companies have also stopped investing in firms that contribute to climate change. The LSE’s decision to reclassify oil and gas companies could be influenced by these recent developments.

The changes, made by FTSE Russell, have now reclassified companies such as Royal Dutch Shell, Cairn Energy, Petrofac, Premier Oil, and Tullow Oil, formerly labeled as oil and gas producers, in the non-renewable energy sector.

Similarly, Danish wind turbine manufacturer Vestas Wind Systems and the Spanish offshore wind group Siemens Gamesa Renewable Energy, which were earlier classified under alternative energy have now been reclassified under renewable energy.

The classifications are done on the basis of the company’s main source of revenue.  For oil and gas companies to be reclassified again, they have to invest heavily in renewable energy and make it their main source of revenue.

The post LSE reclassifies oil and gas firms under non-renewable energy category appeared first on International Finance.

With the programme, Shanghai-listed companies can raise fresh funds through London Stock Exchange and British companies can afford to broaden their investor scope by selling their existing shares in Shanghai.

Zhou Yi, chairman and president at the Huatai brokerage from China, reconfirmed its efforts to list GDRs on the LSE.

Zhou Yi, said, “The program offers us access to one of the deepest and most influential capital markets in the world and provides fungibility between the GDRs and the A Shares,”

Huatai’ GDRs are yuan-denominated. Its ‘A-shares’ currently trade in Shanghai, the company said. It would raise 82.5 million GDRs representing 10 percent of the company’s total share capital.

The company stalled its plans prior to the confirmation in part because there was a lack of clarity over important technical issues. The concern was how the Chinese government would be able to convert currency back to yuan, and whether the connect programme would operate under such conditions.

The Chinese leaders support the London-Shanghai stock connect programme as they show keen interest to lure global investments for China’s biggest companies. The program was unveiled in 2015 during Chinese President Xi Jinping visit to the UK.

Last year, HSBC planned to become the first British company to offer its London-traded shares to investors in Shanghai, several media reports said.

Huatai runs a range of business, including brokerage, wealth management, and investment banking.

The post China brokerage Huatai plans to raise $500 million on LSE appeared first on International Finance.

March 15, 2017: Small and mid-cap fund managers believe the London Stock Exchange’s AIM market has developed into a genuine alternative to the Main Market, according to a survey.

Some large growth companies, typically with a market capitalisation of over £500m, have stayed on AIM to enjoy the cost effective benefits and avoid the extra requirements of the senior Main Market.

This is only possible because professional investors in the small and mid-cap sector now habitually invest in AIM – previously many might wait for firms to graduate to the Main Market.

The Small and Mid-Cap Investors Survey, carried out by YouGov on behalf of RSM and the Quoted Companies Alliance (QCA), surveyed some of the UK’s top small and mid-cap fund managers on their views of the stock market as well as their tips for businesses wanting to make the most of their listing in 2017.

Investors consider perceptions as somewhat more respectful about AIM these days and commentators better understand that it contains a wide range of companies, from start-ups to real growth businesses. Investors also acknowledge AIM plays an important role in the ‘eco system of small-cap funding’ and it has political support through initiatives such as the removal of stamp duty and changes to ISA legislation.

There were less positive views too, with some fund managers calling AIM “devalued” and “a poor place to be” and that it was clogged by a large amount of “sediment” at the bottom of the market, such as micro caps lacking critical mass or the liquidity needed to attract investors. However, these fund managers also agreed AIM can work very well for individual companies with a great offer, though they would like to see a little more control over quality.

Among nominated advisers (‘Nomads’) and corporate brokers who advise AIM-quoted companies, fund managers prefer to work with those who have gained their trust over time by doing a good job and making them money. Successful advisers conduct proper due diligence and offer a complete service, including effective market making.

There is little pressure for firms to move from AIM to the Main Market unless managers restrict their activities to the larger market. Managers acknowledge that some large firms may wish to stay on AIM and are not worried about any outdated associated stigma.

A couple of fund managers felt the quality had improved, with better companies and also better advisers thanks to good work by the London Stock Exchange. It was also felt that there had been fewer failures on the market recently even though they will continue to happen. One view is that the financial crisis has killed the chances of less suitable firms coming to market. Poorer performing businesses that are already listed have struggled for financing, resulting in a flight to quality, driven primarily by risk aversion.

As well as commenting on the overall health of the growth markets, investors gave their views across a wide range of topics, to help companies stay on top of their game. These include how to address Brexit – “Don’t use Brexit as an excuse” – and what makes an effective chair and finance director.

Some chairs were described by investors as “just appalling, a waste of space” because they fail to challenge management by asking the difficult questions. It is clear they are not representing shareholders’ interests. Indeed, one investor suggested that there was a strong correlation between the best companies and their tendency to have the best chairs.

Diane Gwilliam, RSM’s head of capital markets, said, “Small and mid-cap Investors are telling us that AIM is in the best position that it has ever been. Yes, it has its faults but this is far outweighed by the benefits that accrue to companies and investors. The survey also shows that the investors we spoke to value a highly effective finance director that challenges a CEO if required. There are a number of macro issues impacting the market, and it was clear to see the uncertainty around Brexit was front of the mind for the small and mid-cap investors, but they did reveal some useful tips on how to handle Brexit.”

Tim Ward, chief executive of the Quoted Companies Alliance said, “It’s good to see that there is more positive sentiment towards AIM. The Government, the Exchange, advisers and investors have devoted much money and resource in creating and developing a market for growth companies that can deliver huge benefits for the UK economy. This, more positive, approach will attract more companies to the market over time. Our small and mid-cap investors also tell us that these new companies will need to have boards led by proactive and challenging chairs.”

The QCA RSM Small and Mid-Cap Investors Survey 2017 – Insights for companies seeking equity investment is available on the QCA website www.theqca.com/investorssurvey2017

The post Survey: Investors see positive changes to AIM appeared first on International Finance.

May 31, 2016: DP World on 27th May launched $1.2 billion Sukuk bond in London Stock Exchange (LSE). It now becomes the fourth Sukuk to be launched this year in LSE. This follows the first ever Sukuk from Islamic Corporation for the Development of the Private Sector (ICD) in April this year. LSE has a strong track record of supporting Sukuk issuance in its markets. More than $47 billion has been raised through 65 Sukuk issues in London, which is also home to six Islamic banks. There are currently 33 active Sukuks on LSE. Nikhil Rathi, CEO, London Stock Exchange & Director of International Development, London Stock Exchange Group said: “The fact that the UK was the first country outside the Islamic world to issue a Sukuk bond, which experienced exceptional demand, underlines London’s standing as the world’s leading international financial centre. And today’s listing of DP World Sukuk on our markets confirms London Stock Exchange as a key destination for foreign, Shariah-compliant financial products. It also showcases UK’s attraction as a leading global financial hub with a deep pool of international capital interested in these products.”

The post DP world launches Sukuk in LSE appeared first on International Finance.

Tim Evershed

September 19, 2014: Global markets and British business leaders responded positively to the news that Scotland had voted to stay part of the UK in its referendum on independence.

The Better Together campaign triumphed with over 55% of the vote following a huge turnout of over 84% of the Scottish electorate.

In response the pound rose against the dollar in overnight trading on the Asian markets. It leapt nearly 0.8% to $1.6525 against the US dollar, before falling back slightly. Despite dropping back, sterling stays on course for its biggest two-day rise against the dollar in a year. And is at its strongest against the euro at €1.27 — the strongest in two years.

The result was welcomed by investors with many predicting a rally in early trading on the London Stock Exchange.

Tom Elliott, deVere Group’s International Investment Strategist, said: “UK financial markets will rally on relief that it is ‘back to normal.’ The possibility of an imminent major upheaval is now over.”

These predictions were borne out as the FTSE 100 Index rapidly rose 40 points and was still going strong at the time of writing. Key Scottish stocks were also up: Lloyds Banking Group by 2.60%, Royal Bank of Scotland was up 4.17%, Standard Life gained 1.76% and Aberdeen Asset Management increased by 2.16%.

Elliott said: “The risk that the UK would inherit Scotland’s share of the national debt, but without the income coming from oil, risked pushing the debt/GDP ratio and current account deficit into dangerous territory.  This is what had been weighing on the sterling.

“After an initial rally today, I suspect that in the near-term there will be little repercussions from events over the past two weeks on the UK economy.”

A positive start to trading in London would continue the trends of yesterday. Then as the polls swayed towards a ‘No’ vote, key financials with headquarters in Scotland rose.

Lloyds Banking Group gained 1.38%, Royal Bank of Scotland rose by 1.73%, Standard Life picked up 1.54% and Aberdeen Asset Management rallied by 2.06% while the pound also made gains against the US dollar and euro.

The eventual margin of victory of almost 10% was far more comfortable that many polls had been predicting in the closing stages of the contest. Some had even given the nationalists a slender, albeit brief, lead.

It was enough to spook UK businesses though and some were forced off the political fence into backing the union. Retailers warned of price hikes while banks and insurers made public their contingency plans to re-domicile if Scotland gained independence.

Last night’s result let those companies “breathe a sigh of relief” that it would be business as usual in the UK.

Simon Walker, Director General of the Institute of Directors, said: “There can be no doubt that many businesses will breathe a sigh of relief that the prospect of a contentious currency debate and prolonged economic negotiations have been avoided, and yet we know that significant changes are still on the cards.

“The main party leaders have made clear their intention to devolve further power to the Scottish Parliament, and over time this will give the people of Scotland more of a say over how to manage their economy.

“As negotiations commence on a future settlement for Scotland, the focus must be on ensuring that any new powers are used to boost Scotland’s economic competitiveness, unleash enterprise and attract further investment.

“We are now at the beginning of a national debate about economic devolution. The Scots started that debate, and now it’s time for all of us to contribute new ideas about how our nations, regions and cities are run for the benefit of the entire country.”

The post Scottish referendum: Businesses breath a sign of relief appeared first on International Finance.