Hedge-fund firm Millennium Management and Norway’s sovereign-wealth fund Norges Bank Investment Management (NBIM) are among the investors that participated in battery maker Contemporary Amperex Technology Co. Ltd.’s (CATL) $5 billion share sale, according to people familiar with the matter.
Trading giant Jane Street Group and alternative-asset manager Hillhouse Investment also secured allocations in what is Asia’s largest share sale of the year. These individuals requested anonymity as they were not authorized to speak publicly about the transaction.
Jane Street, whose equity capital markets division often provides liquidity to share sales as a market maker, declined to comment on its involvement. Similarly, Millennium Management did not provide a statement. Hillhouse and CATL did not respond to requests for comment, and NBIM did not immediately reply to an inquiry.
CATL launched this significant share sale barely a year after its $5.3 billion Hong Kong listing. The company capitalized on a narrow market window, taking advantage of a period of de-escalation in geopolitical tensions in the Middle East.
Foreign Capital Signals Confidence
Bosco Wu, investment strategist at East Asia Securities, commented on the implications of foreign institutional investor participation. “The participation of foreign institutional investors in the share placement not only helps broaden CATL’s shareholder base but also signals that foreign capital remains eager to invest in Chinese companies despite prevailing geopolitical uncertainties,” Wu stated. He added, “A broader overseas shareholder base may help mitigate the political risks CATL may face in its overseas expansion.”
Sources familiar with the matter indicated that hedge funds purchased the majority of the shares offered. Some of this demand was reportedly driven by traders looking to cover existing short positions on CATL’s Hong Kong-listed shares.
Unusual Trading Dynamics
CATL’s shares have presented an unusual trading dynamic. Bets linked to soaring energy prices have propelled the Hong Kong-listed shares to a record premium over their Shenzhen listing, a rare occurrence as typically the reverse is true for dual-listed companies. This significant price gap fueled a buildup of short positions, even as the stock has seen a substantial 139% increase since its Hong Kong debut last year.
More than 150 entities placed orders for CATL’s share sale, including a mix of hedge funds, sovereign-wealth funds, and existing shareholders, according to individuals with knowledge of the situation. The company ultimately priced the deal at the lower end of its marketed range.
