Fast Retailing's IPO to strengthen investor relations in Asia

ANALYSIS_ Parent group to the dubbed 'Asian Gap', Uniqlo, has announced its intentions of taking on a secondary share listing in Hong Kong. Fast Retailing is said to be ready to issue depositary receipts on the Chinese stock market on March 5, pending on approval from the exchange.

Rather than to raise funds or to issue new shares to enlarge their shareholder base, Fast Retailing said the move was meant to "demonstrate the company's commitment to, and focus on, Asia" as well as boosting its exposure to investors and customers "in the rapidly growing Asian market including China".

Depositary

receipts are a mechanism frequently used by firms to let investors trade their shares on a foreign exchange, highlights Bloomberg.

The firm added that it had no immediate plan to issue new shares or raise additional funds, with its primary listing to remain in Tokyo.

Hence, investors would be able to buy and sell Fast Retailing shares in Hong Kong dollars, instead of trading the yen-denominated stock in the Japanese capital.

"The purpose of the Hong Kong listing is to raise the company's profile in greater China and Southeast Asia," clarified the company Monday.

Fast Retailing launches secondary IPO in Hong Kong

Uniqlo's parent group Fast Retailing announced the company plans to commence secondary listing via HDR, a depositary receipt programme listed on the Hong Kong Exchange (HKEx) securities market. However, the application is still to be approved by HKEx.

The anticipated date of listing was 5 March, and Morgan Stanley Asia was the listing sponsor.

The Board of Fast Retailing pointed out the group will not issue new shares or raise capital in the secondary listing, explaining the listing plan in HK aims to allow international investors making investments in the company, as well as enhancing its reputation in China and other Asian countries.

"We expect high growth in the Asia region," Chief Financial Officer Takeshi Okazaki told reporters in Tokyo. "Hong Kong is the financial centre for the Asia market," he added, further explaining the company's decision.

On the wake of the news, Fast Retailing's stock in Tokio closed the session 1.60 percent lower at 37,600 yen, in line with the broader market which fell 2.51 percent.

Fast Retailing's stock almost doubled in value in Tokyo trading last year, beating the 51 percent climb of the broader Topix index. The shares fell 1.6 percent to close at 37,600 yen in Tokyo trading.

Earlier in January, Fast Retailing made senior appointments to Uniqlo's management, tapping on its main competitor's talent. Former Juicy Couture executive LeAnn Nealz has joined the Japanese brand as chief creative while John Fleming will take up the role of CEO of Uniqlo e-commerce globally, joining after almost ten years at Walmart Stores. Steven Sare will join Uniqlo as chief merchandising officer after years wearing the same helmet at Express Inc. and Jörgen Andersson will take up the role of co-global chief marketing officer to bring on his experience as new business director at Esprit Holdings.