Vale and Sateri fail to excite on securities trading debut
The securities of two Brazilian firms that began trading on the Hong Kong stock exchange yesterday - mining giant Vale and wood-based cellulose maker Sateri - failed to ignite interest from investors on their debut.
Turnover of Vale's common depositary receipts - which represent one share - was just over HK$50 million. For its class A preferred depositary receipts it was HK$4.31 million. That was relatively low given that its market capitalisation rivals Hong Kong-listed HSBC, which regularly comes top in terms of turnover.
Sateri, which owns pulp production mills in Brazil and China and is controlled by Indonesian billionaire Sukanto Tanoto and his family, traded in low volumes before closing at HK$6.50 - down 1.52 per cent from its offer price on its debut.
Vale, which is already trading in Sao Paulo, New York and on Paris' Euronext, offered 259 million common Hong Kong depositary receipts (HDRs) and 393 million class A preferred depositary receipts.
The HDRs opened at HK$270 and closed at HK$265.20. They closed 0.7 per cent above the US$33.93 closing price of Vale's American depositary receipts (ADRs) in New York on Tuesday, and 1.4 per cent above the closing price of 56.72 Brazilian real on Brazil's stock exchange.
The class A preferred depositary receipts opened at HK$236.60 and closed at HK$233.
Vale, which counts China as its biggest customer for iron ore and other metals, raised no proceeds from the listing of the HDRs.
Vale's chief financial officer, Guilherme Cavalcanti, said the listing of HDRs could attract Hong Kong retail investors and improve its 500,000 shareholder base, adding he was not concerned with the share prices.
But not many retail investors traded the HDRs yesterday, said Steven Leung Wai-yuen, a director of institutional sales at broker UOB Kay Hian. 'I don't think Hong Kong investors are very familiar with Brazilian companies,' he said. 'They know mainland mining companies well but it's not the case with foreign firms.'
The response from small investors for shares of Sateri, which raised a total of HK$3.12 billion in an initial public offering, was also lukewarm after its retail tranche was undersubscribed.
According to a statement filed with the exchange, Sateri offered about 50.53 million shares to the public and only received 2,497 valid applications, with about 32.37 million shares allocated.
The stock, which was priced at HK$6.60, only traded as high as its offer price before closing lower.
