Luggage maker Samsonite International yesterday became the latest float to sink on its debut as investors turn cold on initial public offerings.
The US-based company fell as much as 11 per cent on its first day of listing, losing a total of 7.72 per cent before closing at HK$13.38.
Samsonite failed to price its float at the top end of the indicative price range of HK$13.50 to HK$17.50, settling at HK$14.50 a share in the end.
Pricing at the top of the range would have given Samsonite a valuation of 26 times forecast 2011 earnings rather than the present 21 times.
Global brands are stepping up their efforts to tap Hong Kong's equity market, hoping that a listing in the city will give them a higher valuation than in their home countries. They also are banking on the growing spending power among Asia's affluent, especially on the mainland, which is now the second-largest economy in the world.
But Samsonite and Italian fashion house Prada, which yesterday ended its subscription to the public, have not made a solid impression on local investors. Samsonite, which raised HK$1.43 billion after taking away expenses and fees, received just 5,830 valid applications from the public, according to a filing with the Hong Kong stock exchange.