'The outcome is disappointing, especially since the IPO was priced at the low end to allow more upside,' said Ben Kwong Man-bun, a director of investment services at KGI Asia.

Shenhua, which last week raised $22.97 billion in the world's largest initial public offering of the year to date, was the first among three major mainland companies scheduled to list on Hong Kong's main board in June, the busiest fund-raising month in five years.

If another couple of large deals came to fruition - such as that of China Construction Bank or last year's postponed Link Reit offer - this year could surpass even 2000 to become the record holder, stock exchange officials said yesterday.

Hong Kong Exchanges and Clearing chief executive Paul Chow Man-yiu said the exchange was processing 60 listing applications.

'It is clear that we will have a record month, but I am not sure if we can also make this year a record year. What is certain is that there are going to be some very big players coming to list here,' HKEx chairman Charles Lee Yeh-kwong said at Shenhua's listing ceremony.

Aside from Shenhua, Bank of Communications and China Cosco Holdings are aiming to raise more than US$1 billion each this month.

Together with a few smaller offers, it could bring the monthly total raised by new listing candidates to about $50 billion, surpassing the previous record of $44 billion, hit in June 2000.

That was when mobile operator China Unicom raised $43.61 billion in Hong Kong's largest share offer, greatly contributing to the total of $117.3 billion in a year dominated by the dotcom bubble and investors falling over themselves to subscribe to internet and telecommunications stocks.

This kind of activity means more money in the coffers for HKEx as well as for the underwriting banks, which stand to reap handsome fees for bringing the companies to market. Taking a typical fee of 2.5 per cent of the value of a public offer, the 12 listings this year - having raised a combined $35 billion - will have yielded $875 million to the banks involved.

Shenhua shares opened slightly higher at $7.65 and briefly touched a high of $7.70. According to brokers, some retail punters who had borrowed funds to subscribe might have been able to break even at these levels, but only investors who bought shares for cash would have been able to reap any profit.

'Some clients started to get impatient as the price failed to move higher as they wanted to sell and use the money to subscribe for other IPOs,' one retail broker said, noting that many decided to offload shares at a loss.

The selling picked up after lunch, with 58 million shares changing hands in the first five minutes of afternoon trade, which quickly pushed the price below the key $7.50 level.

Brokers said the large order volumes suggested many sellers were institutional clients and a lot of the selling also appeared to come from European investors.