Retail investor sentiment towards initial public offerings has slackened despite the strong stock market rally and ample liquidity, local securities brokers said yesterday.
In offerings that have been open for subscription since Monday, printed circuit board producer Meadville Holdings drew orders for more than 20 times the shares available to retail investors and Fujian-based drugmaker Wuyi International Pharmaceutical just 40 times the shares slated for them, market sources said.
Five brokerage firms polled by the South China Morning Post - Sun Hung Kai Financial, Prudential Brokerage, KGI Asia, Celestial Asia Securities Holdings and Phillip Securities - received a combined HK$2.05 billion worth of margin orders for Wuyi and HK$3.48 billion for Meadville.
The moderate response paled beside the red-hot sentiment towards IPOs late last year. Boosted by the exuberance, China Communications Construction received retail orders of more than 200 times the lot available to them and Shanghai Jin Jiang International Hotels more than 400 times.
In light to the weaker response to the two IPOs, brokers now have idle margin funding, in contrast to late last year when they were strapped for cash.
Prudential associate director Kingston Lin attributed the moderate response to the uninspiring quality of the two offers.