Magnum shares soar on disco firm's debut

Hong Kong's first listing of a nightclub and disco operator, Magnum Entertainment, rode on a recent wave of impressive first-day pops as it almost doubled its offer price in its trading debut yesterday.

Shares in Magnum, which manages three clubs in Central, rose as much as 114 per cent at one point yesterday before closing up 89.3 per cent at HK$2.84, as its retail tranche was a record 3,500 times oversubscribed.

The hype for the firm was partly due to the unusually nimble offering size and its unique business model, making it one of the hottest offerings in Hong Kong's initial public offering market. Yesterday Magnum ended the day worth HK$852 million. The firm raised HK$126 million in the listing.

Magnum's stellar performance marked it as the best-performing stock in almost six years since local business tycoon Albert Yeung Sau-shing's New Media Group went public in February 2008, according to data provider Dealogic. Magnum ranked as the seventh best-performing new listing on the Hong Kong stock exchange.

Ben Kwong Man-bun, chief operating officer of Taiwanese brokerage KGI Asia, urged investors to take some profits off the table as yesterday's surge was primarily driven by favourable sentiment over the club operator's high-margin business model.

Magnum, controlled by Yip Mow-lum, chairman of Hong Kong-listed brokerage firm Bright Smart Securities, said it is in discussion with Allan Zeman about expanding into other affluent mainland cities.