Xingfa, Solargiga debuts disappoint
Xingfa Aluminium Holdings and Solargiga Energy Holdings performed poorly on their trading debuts yesterday, dragged down by market weakness and a shrinking investor appetite for initial public offerings.
Mainland aluminium product maker Xingfa Aluminium dropped 7.4 per cent to close at HK$2.12, and mainland solar equipment maker Solargiga ended almost unchanged at HK$2.93, compared with an offer price of HK$2.92 a share.
The two companies raised a combined HK$1.27 billion from their public offerings.
ICEA was sole adviser for Xingfa's deal, while BNP Paribas was bookrunner for Solargiga's share offering.
The lacklustre performance of the Hang Seng Index has already led to three initial public offerings being pulled in March. The offerings could have raised a combined HK$40 billion.
The index has fallen 18 per cent since the beginning of the year.
Evergrande Real Estate Group and packaging firm Wing Fat Printing scrapped planned offerings a week earlier, citing the volatility of international capital markets.
'We are closely monitoring the market, but there's nothing to do beyond that,' said a banker who is arranging two public offerings.
The two offerings could raise more than HK$6 billion.
'Investors will shy away from share offerings if they don't allow them to make quick money,' said CASH Asset Management associate director Patrick Yiu Ho-yin.
To fund capital expenditure in coming years, Guangzhou-based Evergrande is seeking US$400 million from private equity firms and hedge funds through a private share placement, sources said earlier.
It failed to attract sufficient orders from retail and institutional investors for a planned public offering that could have raised HK$16.5 billion, amid concerns over rumoured tightening measures and the weak property market on the mainland.