Hui Xian shares drop 1.3pc in pre-listing trade
Hui Xian, the first yuan-denominated real estate investment trust outside the mainland making its debut today, fell 1.33 per cent below its offer price yesterday on the pre-listing trading platform.
According to Phillip Securities, which operates the only pre-listing trading platform in the city, Hui Xian shares yesterday declined as soon as trading started on PhillipMart, an automated electronic platform.
Hui Xian shares closed at 5.17 yuan (HK$6.15), down from the offer price of 5.24 yuan.
Phillip Securities said the shares traded in an eight-fen range.
The dip in the pre-listing price followed a lukewarm response from retail investors despite the general interest in yuan-denominated financial products.
According to a statement filed with the Hong Kong stock exchange yesterday by Hui Xian, there were 36,303 valid applications for the offering, representing 2.19 times the shares available for the public.
Hui Xian anticipated a good response for the public tranche so the proportion of shares allocated to the public - at 20 per cent - was more than the usual minimum of 10 per cent.
The reit, which is a spin-off of Beijing Oriental Plaza, a property project from Li Ka-shing, has been priced at the bottom end of the indicative price range of 5.24 to 5.58 yuan.
Brokers have attributed the tepid response to the offering's unattractive yield compared with other Hong Kong-listed mainland reits and concerns over liquidity in the secondary market.
Despite the mainland's tight control of capital flows and the yuan not being fully convertible, the launch of a yuan equity offering was seen by the financial industry as another step towards the internationalisation of the currency.
An offshore yuan bond market in Hong Kong was established in 2009.
The Hui Xian initial public offering picked up a total of 10.48 billion yuan of gross proceeds before debt expenses.