China Everbright's not so bright on trading debut

Five new listings made their debuts on the Hong Kong stock exchange yesterday, with China Everbright Bank, the largest flotation of the year, performing the worst.

After falling as much as 5 per cent below their offer price of HK$3.98, shares in China Everbright ended the day down 2.8 per cent at HK$3.87, in stark contrast to the best-performing debutante, architectural service provider CCheng, which was listed on the Growth Enterprise Market and saw its shares surge 28.9 per cent from their offer price of 83 HK cents to HK$1.07.

Meanwhile, all five firms that made their debuts on Thursday finished yesterday above their issue prices, led by the mainland cemetery owner Fu Shou Yuan, which edged down 2.7 per cent yesterday to HK$4.69, still above its offer price of HK$3.33.

The investment outlook for China Everbright, which had made two previous attempts to go public in Hong Kong, was clouded with fears of a cash crunch in the mainland's banking system, analysts said.

However, Lin Li, vice-president of the joint-stock commercial bank, said that if the company required more capital, it could raise it by issuing preference shares or other innovative ways. He said such plans were continuing but declined to give a specific time frame.

Kenny Tang Sing-hing, a general manager at AMTD Financial Planning, said the tapering of the quantitative easing programme by the Federal Reserve in the United States had put the Hong Kong market under pressure. For the week, the benchmark Hang Seng Index fell 0.3 per cent, or 76.57 points, to 22,812.18 points.