Retail tranche of the offer is 1,603 times oversubscribed, a milestone in Hong Kong
Farming and food processing company China Green (Holdings) said the retail tranche of its HK$192 million initial public offering was 1,603 times oversubscribed, making it the most heavily subscribed IPO in Hong Kong's history.
The over-subscription rate beat red-chip Beijing Enterprises Holdings' record of 1,275 times in mid 1997, before the stock market crashed in October.
'You can't just look at the subscription rate. This is a very small IPO and is the first main-board listing for this year,' Christfund Securities chairman Christopher Cheung Wah-fung said.
He cautioned investors were becoming irrational, overly speculative and were failing to pay attention to the quality of companies.
'They are simply hoping to make a quick buck from subscribing to IPOs. But this will not always be the case,' Mr Cheung said.
China Green sold a total of 150 million new shares at $1.28 each. Of this only 15 million, or 10 per cent, of the shares were offered to retail investors. The deal locked in a total of $30.8 billion, compared with the $215 billion recorded by Beijing Enterprise's IPO.
