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Hong Kong bank rates spike ahead of AB InBev’s IPO

AB InBev, Hong Kong Interbank Offered Rate

AB InBev’s public offering is anticipated to be the world’s largest IPO of the year

The Hong Kong Interbank Offered Rate (HIBOR) increased on Thursday with investors seeking cash ahead of the world’s largest IPO of the year, media reports stated. Brewer Anheuser-Busch InBev (AB InBev) is looking to raise up to $9.8 billion by listing its Asia-Pacific business in Hong Kong.

 The Wall Street Journal said that AB InBev’s public offering would be even bigger than Kraft Foods’ offering in 2001.  Hong Kong will benefit from AB InBev’s public offering considering that it is lagging behind the New York Stock Exchange and the Nasdaq this year. 

Carie Li, an economist at OCBC Wing Hang Bank, told Reuters, “We haven’t seen such a large IPO for a while, and it is happening during the dividend season when liquidity is usually tight.”  Alibaba is also planning to raise up to $20 billion in Hong Kong’s stock market this year. It appears that Hong Kong-listed Chinese companies will have to pay $55 billion of dividends, according to global analysts from Bank of America Merrill Lynch.

In 2017, HIBOR’s increase also boosted the value of Hong Kong dollar to $4, seen at 7.7893 per dollar. It increased by 0.1 percent on that day. A broad comparison between the value of the US and Hong Kong currency encouraged lenders to borrow Hong Kong dollars cheaply. So far, Shenwan Hongyuan Securities has been the biggest listing of this year’s Asian financial hub. The company raised $1.2 billion in April.

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