Citic Securities yesterday became the latest new listing to make an unimpressive debut in Hong Kong, where initial public offerings this year have largely slipped under water.
Citic Securities is the fourth-largest public float in Hong Kong this year, raising US$1.7 billion. But the Shanghai-traded mainland brokerage tumbled as much as 4.5 per cent during trading, ending yesterday flat on its trading debut at HK$13.30, the same as its offer price.
The IPO was poorly received by increasingly jittery investors concerned about deteriorating global economic conditions.
Despite making just 5 per cent of the shares available to the public, the retail portion of the IPO was undersubscribed. Typically an IPO allocates about 90 per cent of the shares to international investors, leaving 10 per cent to the public.
Local brokers said IPOs had lost their appeal of late due to their poor performances and weak appetite for equities. Hong Kong has been the top destination for IPOs over the past two years.
So far this year there have been 52 IPOs in Hong Kong, collecting a total of US$24.37 billion in proceeds, according to statistics provided by Dealogic. Of those new listings, most are under water and investors in new shares have been left nursing millions in losses.