HONG KONG |
HONG KONG (Reuters) - Two of Hong Kong's biggest initial public offerings fell in their trading debuts on Thursday, underscoring weak investor demand that has pressured new listings in the once booming global IPO powerhouse.
Chow Tai Fook Jewellery Group Ltd (1929.HK), the world's biggest jewellery retailer, slumped more than 8 percent in early trading, while New China Life Insurance (1336.HK) was down about 9 percent after the two companies raised a combined $3.9 billion. New China Life, which listed both in Hong Kong and Shanghai, will debut in mainland China on Friday.
Both deals had been priced at or near the bottom of their indicative ranges, signaling the lack of appetite from retail and institutional investors wary of the outcome from Europe's debt troubles, despite a year-end scramble to get some deals done.
Haitong Securities Co Ltd (600837.SS), China's No.2 brokerage by assets, pulled its up to $1.7 billion Hong Kong stock offering on Monday due to poor market conditions, although some smaller IPOs were more successful in Shanghai.
Both Chow Tai Fook and New China Life said in separate securities filings that their international offerings were only "moderately over-subscribed."
Demand from Hong Kong retail investors, who focus on the first-day performance of IPOs, was well short of the total offered for New China Life. Chow Tai Fook said it received orders worth almost seven times the total offered, compared with more than 2,000 times over subscription for the IPO of handbag retailer Milan Station (1150.HK) in May.
Chow Tai Fook shares fell as low as HK$13.66 shortly after opening from its IPO price of HK$15 a share. New China Life, which is 15 percent owned by Swiss insurer Zurich Financial Services AG (ZURN.VX), dropped to HK$25.9 from the HK$28.5 offering price. The broader market .HSI fell for a sixth day running and was down 1.4 percent.
Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), HSBC (0005.HK)(HSBA.L) and JPMorgan (JPM.N) were joint global coordinators of the Chow Tai Fook IPO, with Citigroup (C.N), Credit Suisse (CSGN.VX) and UBS (UBSN.VX) acting as joint bookrunners.
China International Capital Corp (CICC) and UBS Securities were lead underwriters of New China Life's Shanghai offering.
CICC, Goldman Sachs and UBS were hired as joint global coordinators of the Hong Kong tranche of the deal, with Bank of America Merrill Lynch (BAC.N), BNP Paribas SA (BNPP.PA), Deutsche Bank, HSBC and China Merchants Securities also acting as joint bookrunners.
(Editing by Richard Pullin)
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