Brokerages see few orders for IPO after developer prices offer above listed peers
Few investors sought margin financing to purchase shares in Shui On Land's upcoming initial public offering, reflecting unease after recent stock market declines and the developer's decision to price its offering above those of its already-listed peers.
Major lenders Sun Hung Kai Securities and Phillip Securities yesterday said they had received only a very small number of orders for Shui On Land while Prudential Brokerage got none on the offering's first day.
At the top end of the range, the shares would be priced at 18 times earnings, compared with the more typical 14 to 15 times for similar listed companies.
Investors who wanted to raise their bet on the mainland property market could instead just buy those shares, said Kenny Tang Sing-hing, an associate director of Tung Tai Securities.
Stephen Tse, an analyst at Phillip Securities, said: 'Mainland property plays are now trading at an average 26 per cent discount to their [net asset value] while Shui On, based on my estimate, is selling at only a 7 per cent discount.'