Shares in Citic Securities (中信證券), China’s biggest listed brokerage, fell on their Hong Kong trading debut yesterday even as the broader market soared more than 4 percent, dealers said.
Investors who subscribed to the firm’s US$1.7 billion share sale, one of the biggest this year, saw their stocks slide 4.21 percent to HK$12.74 by the break on the Hong Kong stock exchange.
The initial public offering (IPO) priced the stock at HK$13.30.
Photo: AFP
Citic’s soft start came as the Hang Seng Index rose 4.31 percent at noon, following several days of consecutive losses.
“Even though Citic Securities is a market leader and has a large client base, investors are concerned it will suffer from the weakness in the A-share -market, as brokerage commissions are one of its biggest sources of revenues,” Core Pacific-Yamaichi analyst Castor Pang (彭偉新) told Dow Jones Newswires.
The brokerage locked in 50 percent of the offering from big-name cornerstone investors, including Kuwait Investment Authority sovereign wealth fund and Singapore’s state-owned Temasek Holdings.
The share sale was one of the world’s largest this year, after renowned Italian luxury goods maker Prada made a lackluster debut in Hong Kong in June and raised a lower-than-expected US$2.14 billion.
Several firms have recently backed off plans to list in Hong Kong, sparking concerns that the world’s biggest IPO market may see delays in about US$19 billion worth of share sales from a dozen companies.
Beijing Jingneng Clean Energy (北京京能清潔能源), a unit of the Beijing municipal government, has postponed its US$630 million Hong Kong share sale.
Australian miner Resourcehouse also shelved an IPO originally slated to raise as much as US$3.6 billion, citing weak market conditions.
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