Hong Kong's first RMB IPO raises $1.6bn

Hui Xian Real Estate Investment Trust (87001.HK), a part of Cheung Kong Holdings (0001.HK, CHEUY.OTCBB), held Hong Kong’s first renminbi-denominated initial public offering (IPO), raising about US$1.6 billion, Bloomberg reported. Sources claim that the IPO sold 2 billion units of the trust at US$0.8 each, at the lower end of the marketed price range. The Hui Xian REIT includes high-profile properties, most notably the Oriental Plaza complex in Beijing, and is projected to have a yield of 4.26%. This rate is lower than comparable REITs on offer in Hong Kong, but Hui Xian taps into latent demand from a growing pool of renminbi deposits in Hong Kong – now reckoned to be worth around US$52 billion – with few financial products on offer.