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SCMP Reporter

Market debutants China Shipping Container Lines (CSCL) and Tencent Holdings posted  contrasting  performances on their first day of trading yesterday.

CSCL  plunged 11.8 per cent amid heavy selling pressure from both retail and institutional investors on concerns over valuation, while instant-messaging and wireless services provider Tencent  soared 12.16 per cent.

Observers said BNP Paribas Peregrine, joint bookrunner with Morgan Stanley for the CSCL listing,   supported the  price by buying about 80 million  shares in the open market at the initial offer price of $3.175 in the morning.

However, investors  were  determined to offload their CSCL holdings, driving the price to an intra-day low of $2.75.

This was despite reduced market concerns over a United States interest-rate rise, after  Federal Reserve chairman Alan Greenspan said on Tuesday  the  pace of inflation would allow for a 'measured' approach to monetary policy.

The market had  anticipated limited upside for CSCL's debut, due to its larger size and  tepid demand from institutional investors.

'But more were selling  after Citigroup Smith Barney made a 'sell'  recommendation  with a price target of $2.20,' one broker said.

Citigroup said in a report that CSCL, with a price-to-book  ratio of about 1.45 times,  was pricey compared to the sector average of  1.28.  'We think the company deserves to trade at [the] lower end of market and closer to our target [at] one times book value,'  the report said

CSCL's dismal debut  prompted some investors to reconsider their share applications for the initial public offer  of Ping An Insurance (Group). Tai Fook Securities group executive director and chief operating officer William Lee Yiu-wing said applications for margin financing for   Ping An shares worth more than HK$100 million were withdrawn.

But some believed Ping An shares were likely to be better received, as  they are due  for inclusion  in the Hang Seng Index and the MSCI benchmarks,  making the stock a must-have for passively managed funds.

A market source said the placing tranche of the Ping An IPO was  more than five times covered. He also estimated the retail portion would be 30-50 times subscribed.

CSCL closed at $2.80, 37.5 cents off the IPO price, which was fixed at the bottom of the pricing range.

Tencent  enjoyed strong  support from retail investors.

Some brokers  noted that Goldman Sachs,  sole bookrunner for the listing, sold some Tencent shares between $4.325 and $4.40  to stabilise trading.

Tencent shares climbed as high as $4.625 before settling at $4.15, 45 cents  above its IPO price of $3.70.



Tencent soars as CSCL falls on investor valuation doubt