Top Glove shelves $473 million Hong Kong listing as Ukraine war roils markets

SYDNEY (REUTERS) - Malaysia's Top Glove has postponed its plan to raise US$347 million (S$473 million) in a Hong Kong listing due to elevated market uncertainty after Russia's invasion of Ukraine, its managing director said on Tuesday (March 8).

The manufacturer, which benefited from demand for disposable medical gloves during the Covid-19 pandemic, has a primary listing in Kuala Lumpur and secondary in Singapore, and had planned the Hong Kong listing to broaden its investor base.

“Due to the changing developments in the industry and the current equity market conditions, we have decided to give ourselves more time to pursue this exercise in Hong Kong,” Lee Kim Meow told Reuters, referring to the impact of “Russian military action” on market sentiment.

He said the world’s largest medical glove maker was in no hurry to list as the plan was for the long-term benefit.

Top Glove’s Kuala Lumpur-listed shares fell 6.3 per cent after the news. The stock has fallen 31 per cent in 2022. Its Singapore shares were down 4 per cent to 59.5 cents at 4.34pm.

The glove maker, which reports second-quarter earnings on Wednesday, initially aimed to raise US$1 billion in what would have been a dual primary listing.

Shareholders in December approved the issuance of up to 793.5 million shares which at the current price of RM 1.83  would have raised about US$347 million.

Top Glove had planned to launch the deal in February but postponed it because Russia’s invasion of Ukraine has weighed on investor sentiment and heightened market volatility has impacted the listing progress, a person with direct knowledge of the matter told Reuters earlier.

Share sale halt

A growing number of Asian share sales are being put on hold as markets remain roiled by the invasion.

MSCI’s broadest index of world shares has dropped 13 per cent year-to-date, as geopolitical uncertainty causes investors to flee equities and pile into safer assets.
Chinese fast fashion retailer Shein postponed its US listing ambitions due to the upheaval, Reuters previously reported.

Life Insurance Corp’s plan to raise US$8 billion before March-end in India’s largest-ever initial public offering (IPO) is also now in doubt.

“The prospects of ever increasing sanctions on Russia, the ongoing crackdown on real estate, tech and other sectors in China, passing of the peak of loose monetary policy in the West and it all portends to a rather quiet period for equity capital market activity until the equity and commodity markets settle down,” Sumeet Singh, Aequitas Research director who publishes on Smartkarma, told Reuters.

Hong Kong has recorded the slowest start to the year for IPOs and secondary listings in six years with US$1.17 billion raised in 2022, Refinitiv data showed.

That compares with US$10.16 billion in the same period of 2021 and the lowest since 2016.