The mainland milk producer was the second most active stock as investors flip the shares to make quick profits
China Mengniu Dairy's 24.2 per cent rally on its trading debut yesterday brought back memories of the initial public offering frenzy only six months ago.
The Inner Mongolian milk producer did show a lot of the same signs that signified that rush, including heavy oversubscription of the retail tranche, pricing at the top end of the range and massive first-day trading volume that indicated a lot of investors were 'flipping' the stock for quick profit.
However, analysts said investors were approaching new issues with more scepticism this time around, with offers priced at much more reasonable valuations.
'Investors are more selective these days,' Shenyin Wanguo Securities research director Philip Chan said. 'Mengniu's debut is good in the sense that it shows there is still demand for China consumer product companies, but that is not going to be the case for every issue.'
China Shipping Container Lines (CSCL) was a case in point as it priced its public offer at the bottom of the range after the institutional tranche was covered only 2.4 times, excluding investments by known strategic investors, market sources said.
