Hunan Nonferrous hot as IPO fever rages
Investor enthusiasm for new mainland share offerings shows no signs of abating with the one now on the market, Hunan Nonferrous Metals Corp, expected to be about 500 times oversubscribed, soaking up at least $88.5 billion.
Six brokerages have already received margin financing orders for a total of $18.4 billion, equal to more than 100 times the size of the retail tranche.
The orders at this stage are slightly stronger than those for the most recent mainland listings, China National Building Material (CNBM) and Golden Eagle Retail Group. The building material supplier ended up being 536.6 times subscribed, soaking up $96.54 billion, while the retailer was 306.82 times covered, drawing $43.28 billion from the market.
CNBM soared 20.9 per cent on its debut yesterday to close at $3.325, compared with its offer price of $2.75. Golden Eagle, which began trading on Tuesday, rose 13.49 per cent to $3.575 from its issue price of $3.15.
Phillip Securities says it has lent $4 billion for the Hunan Nonferrous Metals offer. Analyst Steven Tse said: 'I would not be surprised if it is oversubscribed by 500 times.'
Sun Hung Kai Securities has lent $6.4 billion and KGI Asia $4.5 billion, while Hantec Investment and Prudential Brokerage reported orders worth a total of $1.5 billion.
Horace Kwan, a director of Celestial Asia Securities, which has lent $2 billion, forecast a 400 times oversubscription. 'Until a new share drops on the first day, the IPO frenzy will continue for sizeable mainland counters,' he said.
Hunan Nonferrous Metals' offer closes at noon today and is due to start trading on March 31.