Market rally triggers two Hong Kong placements

Following a strong day in Asian equity markets yesterday, it wasn't surprising to see a couple of placements taking advantage not only of the gains themselves, but of the momentum created as investors who have been on the sidelines until now are being "forced" to join in to prevent being left too far behind.

Both deals were for companies listed in Hong Kong, where the benchmark index rallied 5.5% to its first close above 16,000 points since mid-October, and were completed after the market closed. Hong Kong sourcing company Li & Fung raised $350 million of new capital from a top-up placement, while Morgan Stanley sold $111.5 million worth of existing shares in China High Speed Transmission, a manufacturer of gearboxes for wind power turbines.

While the two deals confirm a recent trend whereby high-profile, liquid names have no problem attracting demand as long as their offerings are priced fairly, they also suggest that investors are becoming less price sensitive -- something which should help convince more companies and existing shareholders to come to the capital markets.