Fervour for China-related stocks has reached another peak with grey market prices for two mainland listing candidates reaching huge premiums over issue prices.
Beijing North Star Co, the property arm of the Beijing municipal government, is understood to be trading on the grey market at a 66 per cent premium, indicating an expected subscription rate of over 500 times for its public offering which will close tomorrow.
Brokers said the H share's grey market price had gone to $4 a share from an issue price of $2.40.
North Star is issuing 614.8 million shares to raise $1.47 billion, but only 15 per cent of the shares are set aside for the public, to raise $221 million.
Last week the company fixed its issue price at the top of the suggested range after its international placement was 40 times subscribed, indicating the strength of interest in the scrip.
Red chip Beijing Enterprises Holdings, the window company of the Beijing municipal government in Hong Kong, is also understood to be trading at a hefty premium prior to its listing in two weeks.
Market players said investors were willing to pay a premium of between $7 and $8 over its issue price range of $8 and $9.30 a share in the hope it will become the equivalent of Shanghai Industrial Holdings, a star performing red chip.