Investors more wary of new share sales
Investors are increasingly cautious towards initial public offerings amid volatile market sentiment and poor performances by recent listings.
Hong Kong shoe retailer Walker Group, which aims to raise up to HK$579 million in its initial offering, has received more than 100 times the subscriptions available for retail investors while another listing candidate, Ta Yang Group Holdings, drew orders for almost 60 times the shares in its HK$700 million offer as it closed its retail subscription yesterday, market sources said.
The responses were markedly weaker than the interest in recent larger offerings such as mainland shoe retailer Belle International Holdings and developer Country Garden Holdings.
Belle's offer was subscribed 516 times and raised more than HK$434 billion, the most popular offering in the city's financial history while Country Garden took third place with HK$310 billion.
Market watchers also suggested the poor performance of Sichuan Xinhua Winshare Chainstore had weakened investor confidence.
Xinhua Winshare, which debuted on the main board on Wednesday, dropped as much as 12.6 per cent on its first day while Hong Kong-based Pacific Textiles Holdings lost 1.7 per cent on its first trading day last month.
'It makes sense that they gave up pouring money into new offerings without satisfying returns,' said a fund manager.
Ta Yang's international offering was 13 to 14 times covered compared with Walker's 50 times, sources said. Ta Yang could raise up to HK$700 million offering 200 million shares at HK$2.72 to HK$3.50 each.
Meanwhile, Tianneng Power International, a mainland lead-acid battery maker, closed its institutional offering two days early due to a hot response, sources said.
