Choppy conditions mean trying times for debutants
Three mainboard listing debutants saw their shares trade flat yesterday, while a fourth, Qualipak International, saw a dismal 10.7 per cent drop on its first day.
Shanghai-based car dealer China Yongda Automobiles Services closed at HK$6.62 after trading 2.3 per cent lower than the issue price of HK$6.60 in intraday trading.
The car dealer and one of its minority shareholders had sold 253.54 million shares to raise HK$1.67 billion after it halved the size of the offering amid bearish market conditions. Inner Mongolia Yitai Coal, a large miner based in the north of the mainland, closed at HK$43, flat from the issue price, after falling as much as 4.4 per cent in intraday trading. It had raised HK$7 billion by selling 162.67 million shares.
Shandong-based fabric maker Silverman ended the day at HK$1.10, also flat from the issue price.
'Their performances are actually quite good, considering the Hang Seng Index fell 2 per cent on the day,' AMTD Financial Planning general manager Kenny Tang Sing-hing said.
'But this has more to do with the fact that most of the initial public offering shares are taken up by institutional investors, who tend to be long-term investors, while short-term retail investors are largely staying away from the market.'
Qualipak, which makes packaging boxes for watches, jewellery and eyewear products, closed at HK$1.42, compared with its issue price of HK$1.59. In the course of the day, it tumbled up to 20.1 per cent and managed a rebound only in the last 25 minutes of trading.
Qualipak, which had raised HK$22.86 million by selling 14.38 million shares, is a spin-off from CC Land, a property developer focusing on Chongqing.
Despite the poor timing, Tang said, the spin-off was necessary for CC Land since it allowed the firm to separate its property and packaging production operations to better reflect the divergent market valuations.
Meanwhile, pachinko parlour operator Dynam Japan has reportedly pushed back the first day of its share offer from today to August 24 to allow more time to meet investors - a worried lot amid the global economic downturn and Europe's sovereign debt crisis. A spokesperson for the firm declined to comment.
VC Brokerage director Louis Tse Ming-kwong said given that Hong Kong investors were unfamiliar with Japan's gaming market and could hardly be motivated to study it in the current environment, it would be natural for the Dynam to fetch a lower valuation compared with what it would in its home market.