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Christine Chan

Mainland-backed Brilliance China Automotive Holdings has become the latest victim of the deterioration in market conditions for new listings.

 In the wake of last Friday's decision to postpone a listing by CNOOC, the mainland's largest offshore oil producer, Brilliance China will report today that only 6.4 per cent of the Hong Kong share tranche was subscribed for.

 The local portion represents 10 per cent of the shares on offer.

 The international placing, equivalent to the remaining 90 per cent of the shares available, had a better reception.

 About 96.4 per cent of this part of the issue was subscribed for.

 Taken together, the public share-tranche and international placing was undersubscribed by 12.6 per cent, the company said in an announcement dated today.

 CNOOC was to have secured a dual listing in Hong Kong and New York but withdrew the offer on Friday, blaming adverse market conditions.

 The difficulties CNOOC was experiencing became obvious last Thursday when the issue price and size was slashed.

 The decision the following day to pull the issue came as concerns grew in Beijing about the impact the reduction in pricing would have on overseas listings by the country's two largest oil and petrochemical companies early next year.

 No timetable has been set for CNOOC's relaunch.

 Minibus manufacturer Brilliance China, based in Liaoning, is seeking to raise $642.27 million before expenses from a listing in Hong Kong this Friday.

 The company also has a listing status on the New York Stock Exchange.

 The lacklustre response towards Brilliance China's share offer also underlines investors' caution about the mainland's car industry which is facing sluggish demand and keen competition.

 Entry into the World Trade Organisation would also add to the industry's challenges.

 Investor confidence also received a jolt by comments on Thursday by United States Federal Reserve chairman Alan Greenspan on surging stock prices and interest rate directions.

 Mr Greenspan's comments fuelled a sell-off that saw Hong Kong's Hang Seng Index plummet 6.2 per cent last week, led by the Dow Jones Industrial Average which finished the week 5.91 per cent lower.

 All signs appear to look bad for the forthcoming initial public offerings (IPOs), including TCL International Holdings, a mainland-based electronic and information-technology manufacturer.

 Sources close to the $770 million flotation said yesterday the overseas roadshow - scheduled to start on October 25 - would go ahead as planned, saying TCL would appeal to investors because of its technology concept.

 The TCL issue will be closely watched by the market for indications of investors' appetite for new listings.

 All eyes, however, are on the overseas listings of China Petrochemical Corp and China National Petroleum Corp, in Hong Kong and the US early next year in the wake of CNOOC's postponement.

 Difficulty in predicting the movement of oil prices has added to the uncertain outlook for oil firms.

 About $80.9 million of Brilliance China's unsubscribed shares would be taken up by underwriters according to their underwriting obligations, the company said.

 The underwriting team include sponsor Credit Lyonnais Securities (Asia), co-lead manager BOCI Asia, a unit of Bank of China, and co-managers China International Capital Corp and Tai Fook Securities.

 Trading in the firm's stock will begin on Friday.

 Established in 1992, Brilliance China holds a 51 per cent stake in Shenyang Jinbei Passenger Vehicle Manufacturing, a Sino-foreign joint venture set up in 1991.

 It also holds a 51 per cent share in vehicle window-moulding and stripping manufacturer Ningbo Yuming Machinery Industrial.



Brilliance shunned by SAR investors