Shares in Citic Dameng Holdings, the manganese mining and processing unit of Citic Resources Holdings, gained as much as 10 per cent on its market debut as risk appetite for resources stocks returned after a sharp sell-off.
It closed yesterday at HK$2.92 - 6.2 per cent higher than the offer price of HK$2.75, after a low of HK$2.69 soon after trading began.
Chairman Qiu Yiyong put the initial decline down to volatile conditions on international markets. He said he is confident of the stock's prospects.
'Recent poor performance of resource stocks is a short-term situation. As the supply of resources is getting increasingly tight, the industry's positive outlook has not changed.'
Citic Dameng, China's largest producer of manganese, which is used in steel smelting, raised HK$2.06 billion by selling 750 million new shares to fund expansion at its main production facilities in the Guangxi autonomous region and in Gabon, Central Africa.
It plans to raise its annual output capacity of electrolytic manganese metal - its main product - in Guangxi to 145,000 tonnes next year from 102,000 this year, and actual output by 30 per cent to 122,000 tonnes.