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Euromoney, March 2016

Every now and then a barometer deal comes around: one whose outcome shows the market what to expect. One such was Goodbaby China Holdings, set to be a deal that showed there was still scope to launch IPOs, even mainland Chinese IPOs, in Hong Kong, despite volatility.  Unfortunately, the deal for the baby products retailer pushed the barometer needle towards ‘rain’.

Not since a little-remembered Chinese pork producer called WH Group ditched its listing in April 2014 has a Hong Kong IPO been withdrawn after launch. Morgan Stanley, the sole sponsor alongside BOCI Asia as an underwriter, clearly believed Goodbaby’s deal could get through the grim markets that have characterised the start of the year, but it was not to be. The company says its decision to pull the deal came “in light of deteriorating market conditions and recent excessive volatility.” There is some grumbling in investment banking circles about the nixed IPO ending the chances of anyone else coming to market, but it didn’t tell anyone anything they didn’t already know: that this is an almost impossible environment to launch in.

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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