Haitong fails to excite on debut

PUBLISHED : Saturday, 28 April, 2012, 12:00am
UPDATED : Saturday, 28 April, 2012, 12:00am

The trading debut of shares in Haitong Securities, the biggest initial public offering in the Asia Pacific this year, ended on a disappointing note as they closed at their listing price.

It was the most actively traded stock yesterday on the main board of the Hong Kong stock exchange, with turnover of HK$1.72 billion. It advanced sharply to HK$10.70 in the first hour but declined over the next hour to a low of HK$10.40. It continued a jittery path of ups and downs before closing at HK$10.60.

Brokers said the performance reflected the sluggish outlook for the Hong Kong and the mainland stock markets.

The Hang Seng Index yesterday closed at 20,741.45, down 0.33 per cent; daily turnover remained low at HK$51.3 billion. On the mainland, the CSI300 index, which tracks Shanghai and Shenzhen, fell 0.2 per cent to close at 2,626.16.

Brokers said investors remained sceptical about investing in new shares because of market uncertainty. 'The timing is just not right,' said Louis Tse Ming-kwong, a director of VC CEF Brokerage.

All eyes were on the performance of Haitong, which raised HK$13 billion, as an indicator of market sentiment towards new stocks. The listing was pulled last year when stock market sentiment turned sour on fear of a hard landing on the mainland and uncertainty over the euro-zone crisis.

IPO volume in the Asia Pacific, excluding Japan, dropped to US$6.7 billion in the first quarter of this year, down 65 per cent from US$24.6 billion in the first quarter last year.

Traders also said Haitong's performance could affect the market's perception of several big listings in the pipleline, including luxury jeweller Graff Diamonds, Fosun Pharmaceutical and China Nonferrous Metal Mining Group.

The listings of small and medium-sized mainland private enterprises, on the other hand, could be affected by moves by the Securities and Futures Commission to tighten due diligence and disclosure requirements.

New stock exchange chief executive Chow Chung- kong said yesterday mainland private enterprises would remain the major source of IPOs for Hong Kong. He also expects companies to be cautious with listing plans as the market would continue to be overshadowed by global uncertainties and the slow down in China.



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