China Everbright's not so bright on trading debut
Architectural service provider C Cheng leads the pack of five new IPOs with 28.9 per cent gain
Five new listings made their debuts on the Hong Kong stock exchange yesterday, with China Everbright Bank, the largest flotation of the year, performing the worst.
After falling as much as 5 per cent below their offer price of HK$3.98, shares in China Everbright ended the day down 2.8 per cent at HK$3.87, in stark contrast to the best-performing debutante, architectural service provider CCheng, which was listed on the Growth Enterprise Market and saw its shares surge 28.9 per cent from their offer price of 83 HK cents to HK$1.07.
Meanwhile, all five firms that made their debuts on Thursday finished yesterday above their issue prices, led by the mainland cemetery owner Fu Shou Yuan, which edged down 2.7 per cent yesterday to HK$4.69, still above its offer price of HK$3.33.
The investment outlook for China Everbright, which had made two previous attempts to go public in Hong Kong, was clouded with fears of a cash crunch in the mainland's banking system, analysts said.
However, Lin Li, vice-president of the joint-stock commercial bank, said that if the company required more capital, it could raise it by issuing preference shares or other innovative ways. He said such plans were continuing but declined to give a specific time frame.
Kenny Tang Sing-hing, a general manager at AMTD Financial Planning, said the tapering of the quantitative easing programme by the Federal Reserve in the United States had put the Hong Kong market under pressure. For the week, the benchmark Hang Seng Index fell 0.3 per cent, or 76.57 points, to 22,812.18 points.
Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said yesterday that he hoped to see an improvement in the ranking of the city's bourse in the initial public offering market. More than HK$160 billion was raised through listings in the city this year, up 78 per cent from last year, a survey from KPMG showed.
Li said the market was well prepared for the beginning of a tapering in the US monetary stimulus, and he did not expect the move to have a major impact on trading.
Mainland developer Logan Property gained 2.4 per cent from its offer price of HK$2.10 yesterday to HK$2.15 after reaching as high as HK$2.18. Fuguiniao, a Fujian-based retailer of men's shoes, was up 0.3 per cent from its offer price of HK$8.81 to end at HK$8.84.
TK Group, a provider of plastics solutions on the mainland, eased 0.7 per cent from its offer price of HK$1.25 to HK$1.24 after falling to a low of HK$1.09.