HONG KONG: Billionaire Li Ka-shing's Hui Xian REIT raised 10.48 billion yuan (RM4.8 billion) in an IPO, pricing the first ever yuan-denominated equity offering outside mainland China at the low-end of its indicative range, two sources with direct knowledge of the matter said on Wednesday, Apr 20.

Hui Xian sold two billion units at 5.24 yuan each, at the bottom of the 5.24 yuan to 5.58 yuan indicative price range. The REIT was priced to yield 4.33% in 2011 and 4.73% in 2012, according to a term sheet of the offering seen by Reuters.

The IPO was split, with 80% sold to institutional investors and hedge funds oversees and 20% to retail investors in Hong Kong, the terms said. Yuan deposits in Hong Kong pay rates of 0.4% to 0.6%, while yuan-denominated bonds yield between 1% and 3%, making IPOs denominated in the Chinese currency an attractive option for yield-hungry investors.

Yuan deposits in Hong Kong totalled 407.7 billion yuan  at the end of February, more than quadrupling from a year earlier, with authorities and analysts expecting it to rise to nearly one trillion yuan by the end of 2011.

BOC International, Citic Securities and HSBC Holdings were hired as joint bookrunners for the Hui Xian offering. — Reuters

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