Chinese terminal operator Rizhao Port Jurong’s shares skyrocket in Hong Kong trading debut after retail investors rejected them
- Shares of Rizhao Port Jurong surged by 167 per cent from their offer price
- The spin-off of Shanghai-listed Rizhao Port only managed to sell a quarter of the shares in its Hong Kong retail tranche
Shares of Rizhao Port Jurong, a spin-off of one of China’s largest port operators, skyrocketed by 167 per cent on their Hong Kong trading debut on Wednesday – even after selling just a quarter of its retail shares.
The stock soared by 267 per cent to HK$5.5 from its offer price of HK$1.5 at one point in the afternoon, before falling back to end the session at HK$4. The company raised a total of HK$546.7 million (US$69.8 million) of capital through the listing.
The stunning debut performance is in stark contrast with the company’s initial public offering (IPO) share sale, in which its Hong Kong retail tranche – originally accounting for 10 per cent of all shares – was undersubscribed by 75 per cent, according to a stock exchange filing.
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This mysterious price surge, given the cold response from retail investors, could be a result of the highly concentrated share holdings in the company, analysts say. The 10 largest shareholders of Rizhao Port Jurong together own 97.77 per cent of the total offered shares, according to the filing.
“The real liquidity of the shares is quite low, given how concentrated the shareholding is,” said Alan Li, portfolio manager at Atta Capital, a Hong Kong-based investment firm.
Stocks with vast numbers of shares concentrated in just a few hands are prone to wild price swings.
Rizhao Port Jurong was spun off from Shanghai-listed Rizhao Port earlier this year.