Stock set to soar on debut amid huge demand from investors Nine Dragons Paper (Holdings) has set the initial public stock offering market on fire with the retail share of its float hugely oversubscribed, soaking up $136 billion of investors' cash. Sources said until late last night, its $3.4 billion offering was at least 400 times covered and the bookrunners were still counting orders. The amount tied up by the retail tranche of the mainland's largest containerboard maker dwarfs its size and also outstrips big names, including the Link Reit and China Construction Bank Corp. The bank tied up $130.7 billion in its retail tranche in October last year, and the Link $107.1 billion. As the hottest offering so far this year, Nine Dragons pushed up the overnight Hong Kong interbank offered rate (Hibor) significantly yesterday, by 95.89 basis points to 4.5281 per cent. One-week Hibor rose 85.52 basis points to 4.8938 per cent due to the amount of money tied up in subscriptions. Owing to the response, sources said Nine Dragons was likely to be priced at $3.40, at the top of the range. The company, which is being brought to market by BNP Paribas and Merrill Lynch, is offering one billion shares at an indicative range of $2.85 to $3.40. With its retail tranche being more than 100 times covered, the clawback mechanism will come into effect, requiring the firm to allocate 50 per cent of the offer to retail investors, up from 10 per cent. Kenny Tang Sing-hing, an associate director at Tung Tai Securities, said fund managers who failed to get enough of the allocation were likely to buy in the market, pushing up the share price when it begins trading on March 3. The upbeat market sentiment will also help, with the Hang Seng Index touching a five-year high at 15,812.53 points yesterday on turnover of $42.35 billion - the third highest in history - as market capitalisation rose to $9.21 trillion. Mr Tang said Nine Dragons could surge to $4.50 on its first trading day, a gain of 32.35 per cent. Growth Enterprise Market-board newcomer CMA Logistics began trading yesterday. It surged to $5.10 - 88.88 per cent above the $2.70 offer price - at one stage before closing at $4.95. Other firms that are lining up for listings include waterworks contractor Ming Hing Holdings and China National Building Materials. Sources said Ming Hing planned to float its shares next month. Finance manager Sharon Yeung said the company had recorded turnover of more than $200 million in each of the past three financial years to March last year. Ming Hing is an approved contractor for public works projects and is principally involved in providing waterworks engineering services in Hong Kong. China National Building Materials, the mainland's largest provider of construction industry products, won approval from the stock exchange listing committee yesterday for its up to US$150 million float, sources said.