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Property market fears hit Sunac's trading debut

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Concerns about a property bubble on the mainland helped sink Sunac China Holdings during its trading debut yesterday, sending its stock sliding below its offer price.

The mainland developer dropped as much as 8.1 per cent yesterday morning before finishing down 3.2 per cent at HK$3.37. More than HK$850 million worth of its shares changed hands on the day.

The temperature is going down in the initial public offering market, Ben Kwong Man-bun, chief operating officer of securities firm KGI Asia, said. 'And investors are very selective and they will prefer those [stocks] that have a policy bias where the government policy favours that sector.'

The mainland property market has been red hot, but gains have been driven by speculation, prompting authorities to intervene to cool the sector. Last month, they increased down payment requirements for first and second-home purchases and froze mortgage loans for third-home buyers.

Sunac China develops large-scale residential and commercial property in places such as Tianjin, Beijing, Chongqing and Wuxi.

It said its IPO raised about HK$2.3 billion in net proceeds after pricing shares at HK$3.48 each. It planned to use the proceeds to increase its land bank.

Sunac China planned to list last year but pulled out, citing poor market conditions.

Solar power equipment maker Trony Solar Holdings fared better in its trading debut yesterday, climbing 12.7 per cent to HK$5.07.

The Shenzhen-based company said it raised net proceeds of HK$1.5 billion after pricing shares at HK$4.50 apiece.

Meanwhile, mainland department store operator Springland International Holdings is planning to raise as much as HK$3.7 billion by issuing 625 million shares at a range of HK$4.85 to HK$5.93 each.

About HK$1.5 billion of the net proceeds may be earmarked for network expansion, including three department stores and ten supermarkets which are under construction. Its shares are set to begin trading on October 21.

Hong Kong's main board has had 59 new listings so far this year, including IPOs and listings by way of introduction. There were 68 last year and 47 in 2008, according to data from Hong Kong Exchanges and Clearing.

Meanwhile, the Hang Seng Index edged upward yesterday by 3.9 points, or 0.02 per cent, to 22,884.32. It has advanced in 21 of the past 25 sessions and sits less than 100 points below a two-year high.

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