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HKD: BYD Share Sale Could Raise HKD Cash Demand, Distort Fwd Market

HKD
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Worth noting for HKD cash demand: China's BYD to offer 118mln shares for their Hong Kong listing (ticker is 1211 HK), seeking to raise equivalent of $5.2bln in HKD.

  • Sizeable demand for securities (e.g. IPOs and other share sales) can help narrow the HKD forward discount,
    which has proved sensitive in recent years to a pick-up in capital markets activity, as the uptick in cash demand in turns adds upward pressure to HIBOR.
  • The $5.2bln raise is of decent size - not the largest share sale in recent years, but is comfortably the biggest capital raise of 2025 so far. Adds to the expected pipeline that also includes the long-awaited Chery Automobile IPO - seen raising as much as $14bln at some point this year.
  • The HKD 12m forward discount narrowed to 300 points in October last year, but has drifted since - any narrowing could prove stickier should further fundraising headlines cross in the near-term.
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Worth noting for HKD cash demand: China's BYD to offer 118mln shares for their Hong Kong listing (ticker is 1211 HK), seeking to raise equivalent of $5.2bln in HKD.

  • Sizeable demand for securities (e.g. IPOs and other share sales) can help narrow the HKD forward discount,
    which has proved sensitive in recent years to a pick-up in capital markets activity, as the uptick in cash demand in turns adds upward pressure to HIBOR.
  • The $5.2bln raise is of decent size - not the largest share sale in recent years, but is comfortably the biggest capital raise of 2025 so far. Adds to the expected pipeline that also includes the long-awaited Chery Automobile IPO - seen raising as much as $14bln at some point this year.
  • The HKD 12m forward discount narrowed to 300 points in October last year, but has drifted since - any narrowing could prove stickier should further fundraising headlines cross in the near-term.