Xtep share offering sees minimal interest
Xtep International Holdings, a mainland fashion and sportswear maker tapping the market for up to HK$3.03 billion, has found modest interest from institutional investors but retail investors largely shy away from the offering, according to market sources and brokerages.
The company, which is offering 550 million shares at HK$4.05 to HK$5.50 each, had already 'attracted enough orders' to cover the deal's institutional tranche, a source said.
'The institutional side has been comfortably covered but most of the orders have been placed at the lower end of the price range,' he said.
JP Morgan and UBS are handling Xtep's share offering.
'Getting as many institutional orders as possible is crucial today as most retail investors continue to shy away from new stocks,' said a banker. 'Under such tepid sentiment, securing institutional subscriptions basically equals securing the deal.'
Despite a rebound of 290.83 points or 1.16 per cent in the Hang Seng Index yesterday, the Hong Kong stock market is still down 2,352.36 points or 8.46 per cent so far this year.
Four major securities houses polled by the South China Morning Post received only about HK$5 million worth of margin financing orders for Xtep yesterday, the first day the company opened its share subscription to retail investors. The offer will close on Monday.
'Just very few clients asked about Xtep's initial public offering and many of our clients seem to have lost passion towards new offerings,' said Nelson Chan Kai-fung, a general manager of Bright Smart Securities.
Bright Smart would not launch margin financing service for Xtep 'until the market reception turns better', Mr Chan said.
Meanwhile, Pou Sheng International (Holdings), which is tapping the market for HK$3.09 billion, also saw its institutional tranche basically covered yesterday, a source said.
