State-owned copper producer China Nonferrous Mining Corp (CNMC) plans to raise up to HK$2.44 billion in an initial public offering in Hong Kong - less than the original target.
Weak market sentiment prompted the company, which runs copper mines in Zambia, to lower its fund-raising goal. In the pre-marketing stage it was reported that it planned to raise about HK$3.9 billion.
'The market atmosphere is not ideal for IPOs,' said Kenny Tang Sing-hing, general manager of AMTD Financial Planning.
He said investors were concerned there would be less demand for raw materials if mainland economic growth slows down more than expected. Investors would be sensitive to fluctuations in raw material companies' stock prices, Tang said.
Shares in Hong Kong-listed Aluminum Corporation of China have fallen 12 per cent in the past four weeks, to HK$3.33, while the city's benchmark Hang Seng Index fell 3.9 per cent in that period.
'CNMC offers a share price at a price-to-earnings multiple of about six, which is not high,' Tang said.