CAA joins ranks of market casualties
Mainland-owned iron ore miner shelves plans for share offering, citing poor trading conditions that have prompted other candidates to pull out
CAA Resources, an iron ore miner in Malaysia controlled by a mainland businessman, has become the latest company to postpone its initial public offering in Hong Kong amid "adverse market conditions", two people with direct knowledge of the deal say.
The company was looking to raise HK$691 million after securing three cornerstone investors who pledged to commit US$26 million, or 30 per cent of the entire deal.
According to a person involved in CAA's listing, there was no cornerstone pullback but the general demand for the new shares fell below expectations after the Hang Seng Index yesterday dropped 2.19 per cent and Japan's Nikkei-225 Index fell 6.35 per cent on concerns over exporters' profits.
Two newly listed companies - luxury car dealer China Harmony Auto and property developer Wuzhou International - made mixed trading debuts.
Harmony Auto's shares fell 16.12 per cent below their offer price yesterday, while shares in Wuzhou rose 5.74 per cent to close at HK$1.29.
But for market debutants that have struggled, brokers say overly aggressive pricing could be a factor, making these stocks attractive to short sellers during a market downturn.
Elsewhere, Sze Wai-pan, the chief executive of Freetech Road Recycling Technology, a provider of asphalt pavement maintenance services on the mainland, said the company was confident about its prospects despite the volatile market conditions.