Debuts contrast for Fairform and Yanhua
The stock exchange's two newest listings met contrasting receptions on their debuts yesterday.
Shares in Beijing Yanhua Petrochemical fell 6.82 per cent below their issue price amid a poor outlook for the sector in China.
The H share ended at $1.64, down 12 cents from the issue price of $1.76.
The poor performance had been expected after Yanhua priced its shares at the lower end of its proposed range.
Analysts said investors were cautious about the company's prospects because the petrochemical sector was in a downturn.
Yanhua expects a strong recovery will come, but not until 1999.
Salomon Brothers Asia-Pacific analyst Janet Yang said in a report that Yanhua's earnings next year could be at risk because of an oversupply of ethylene.
She said Yanhua, China's largest ethylene manufacturer, had significant exposure to ethylene-derivative plastics.
Fairform, which makes consumer products, fared better, gaining 37.96 per cent. The firm, which issued 57 million shares, closed at $1.49, compared with an offer price of $1.08.
Brokers said the issue's small size had helped the counter to gain.