China Cosco Holdings has priced its initial public offering at the bottom of the range and will sell only 5 per cent to retail investors after demand fell short of the 10 per cent originally earmarked for them, sources familiar with the allocation said yesterday. The other 5 per cent will be distributed among institutional investors. At the larger 95 per cent size, the portion for institutional investors - including three corporates - was more than three times covered, the sources said. The container shipping and terminal operator became the first major listing candidate to be snubbed by retail investors since Hutchison Telecommunications International suffered the same fate in October last year. Last week, retail investors poured more than $150 billion into Bank of Communications' (Bocom) offer. Observers said the fact that many retail investors had money tied up in Bocom until Thursday last week might have contributed to the lacklustre response, although concern about a potential downturn in the global shipping sector and falling profits was likely to have been the biggest turn-off. While institutional investors did subscribe in greater numbers, they acted cautiously towards projections that the supply of new ships would outweigh demand growth in coming years and attached price limits to their orders. This forced the company to fix the price at $4.25 - the low end of the $4.25 to $5.75 indicative range - which capped the amount of money raised at $9.53 billion. One observer said international investors 'liked the company and the management' but were concerned about the sector, which has been hit by the trade dispute between China on the one hand and the US and Europe on the other. Two other shipping sector offers last week - Eagle Bulk Shipping and TBS International, both bound for Nasdaq - suffered similar treatment from investors, forcing them to downsize their respective offers. The low-end price will value China Cosco at 6.69 times this year's earnings which are forecast to be no less than 4.14 billion yuan - a 0.28 per cent drop from last year. Its profits more than doubled last year amid strong global demand for container shipping services. The firm is valued at a premium compared with container shipping companies such as China Shipping Container Lines and Orient Overseas (International) Ltd because its 52.18 per cent stake in terminal operator Cosco Pacific is expected to smooth out profits between the cycles. Cosco Pacific trades at 13.7 times forward earnings. Hutchison Whampoa and Singapore state investment agency Temasek Holdings each invested US$150 million in the initial offering, while Henderson Land chairman Lee Shau-kee bought $100 million worth of the shares. HSBC, JP Morgan and UBS, which were arranging the sale, declined to comment. The shares will start trading on Thursday.