14-04-2011, 05:28 AM
Stabilization has ended! 
Business Times - 14 Apr 2011
Hutchison Port trust struggles to top IPO price
Amid weak market, stock price dips after bankers stop stabilisation action
By JAMIE LEE
HUTCHISON Port Holdings (HPH) Trust has not touched anything above its IPO price of US$1.01 per unit since its listing nearly a month ago.
Units of the business trust closed yesterday at 95.5 US cents apiece, down 2.55 per cent, with some 100 million units traded. This followed the close of price stabilisation by its bankers this week. On Tuesday, stabilising manager Deutsche Bank said it has ceased to stabilise the unit price, after buying a total of 540 million units - all units offered under the greenshoe option.
Amid a poor market showing - as investors grappled with the nuclear fallout from Japan's massive earthquake - the stock went underwater on listing day. It touched US$1.01 between last Thursday and Monday, but gave up its gains afterward.
Market watchers say that concerns over the weakening greenback against the Singapore dollar still weigh on the stock. Distribution from the trust will be paid out in HK dollars, which is pegged to the faltering US dollar - which means forex losses if the Singapore dollar continues to strengthen as expected.
Foreign funds have been the main buyers of the stock, said UOB-Kay Hian executive director Chan Tuck Sing. 'This could partly be due to its parentage,' said Mr Chan, referring to HPH's honcho Li Ka Shing. 'Response from the local boys has not been that strong.'
The Singapore Exchange's move to facilitate the quotation and trading of HPH Trust in both Singapore dollars as well as US dollars, can mitigate some concerns, Mr Chan said. 'But with an issue of this size, local interest will barely make a dent.' He added that the stock's poor showing could be due to funds adjusting over-allotment from the IPO, which raised some US$5.45 billion.
A BT analysis earlier also noted that while HPH Trust offers fairly attractive yields - with a forecast seasonally annualised DPU for 2011 at 45.88 HK cent - the trust is not obligated to make minimum levels of payout as the real estate investment trusts (Reits) do.
Reits must pay out at least 90 per cent of their distributable income to unitholders to qualify for tax transparency on the amount they pay out.
The hefty IPO was widely seen as a coup for Singapore, which had established perimeters for the listing of business trusts ahead of long-time competitor, Hong Kong, where HPH's business is based.
This has mounted pressure on Hong Kong regulators to review its listing rules to accommodate business trusts, with Hong Kong's telecoms giant PCCW - led by Li Ka Shing's son Richard Li - lobbying for changes in this area to try listing its trust there.
(Not vested)
Business Times - 14 Apr 2011
Hutchison Port trust struggles to top IPO price
Amid weak market, stock price dips after bankers stop stabilisation action
By JAMIE LEE
HUTCHISON Port Holdings (HPH) Trust has not touched anything above its IPO price of US$1.01 per unit since its listing nearly a month ago.
Units of the business trust closed yesterday at 95.5 US cents apiece, down 2.55 per cent, with some 100 million units traded. This followed the close of price stabilisation by its bankers this week. On Tuesday, stabilising manager Deutsche Bank said it has ceased to stabilise the unit price, after buying a total of 540 million units - all units offered under the greenshoe option.
Amid a poor market showing - as investors grappled with the nuclear fallout from Japan's massive earthquake - the stock went underwater on listing day. It touched US$1.01 between last Thursday and Monday, but gave up its gains afterward.
Market watchers say that concerns over the weakening greenback against the Singapore dollar still weigh on the stock. Distribution from the trust will be paid out in HK dollars, which is pegged to the faltering US dollar - which means forex losses if the Singapore dollar continues to strengthen as expected.
Foreign funds have been the main buyers of the stock, said UOB-Kay Hian executive director Chan Tuck Sing. 'This could partly be due to its parentage,' said Mr Chan, referring to HPH's honcho Li Ka Shing. 'Response from the local boys has not been that strong.'
The Singapore Exchange's move to facilitate the quotation and trading of HPH Trust in both Singapore dollars as well as US dollars, can mitigate some concerns, Mr Chan said. 'But with an issue of this size, local interest will barely make a dent.' He added that the stock's poor showing could be due to funds adjusting over-allotment from the IPO, which raised some US$5.45 billion.
A BT analysis earlier also noted that while HPH Trust offers fairly attractive yields - with a forecast seasonally annualised DPU for 2011 at 45.88 HK cent - the trust is not obligated to make minimum levels of payout as the real estate investment trusts (Reits) do.
Reits must pay out at least 90 per cent of their distributable income to unitholders to qualify for tax transparency on the amount they pay out.
The hefty IPO was widely seen as a coup for Singapore, which had established perimeters for the listing of business trusts ahead of long-time competitor, Hong Kong, where HPH's business is based.
This has mounted pressure on Hong Kong regulators to review its listing rules to accommodate business trusts, with Hong Kong's telecoms giant PCCW - led by Li Ka Shing's son Richard Li - lobbying for changes in this area to try listing its trust there.
(Not vested)