Posted on 06/29/2005 11:24:06 PM PDT by familyop
China COSCO Holdings Ltd., a unit of China's largest shipping firm, made a lackluster debut Thursday on Hong Kong's stock market, opening 11 percent down from its initial public offering price.
The company raised $1.22 billion in third big mainland Chinese IPOs this month.
The stock started trading at 3.80 Hong Kong dollars (49 cents), quite a bit below its IPO price of HK$4.25 (55 cents) and even worse that analysts' gloomy projections. The stock dipped as low as HK$3.70 (47 cents) during morning trading.
"It's a disaster for a major issue of this size," said Francis Lun of Fulbright Securities.
COSCO's Executive President Wen Jiafu left the stock exchange without talking to reporters.
Analysts had forecast a weak start for the firm's listing because it's overpriced and the shipping industry's dark outlook due to concerns about oversupply.
Investors were also spooked by reports from the investment banks sponsoring the sale - HSBC Holdings PLC, UBS Investment Bank and J.P. Morgan Securities Ltd. - which said the company's earnings will decline next year.
Traders said there was not much buying from the sponsors Thursday.
Three strategic investors had bought $400 million of the IPO's institutional tranche: Hutchison Whampoa Ltd., owned by tycoon Li Ka-shing, bought $150 million; Lee Shau-kee, the chairman of Henderson Land Development Co., took $100 million; and the rest were bought by Singapore's state-owned investment arm Temasek Holdings Ltd.
China COSCO's listing was expected to be the last of three $1 billion-plus mainland Chinese offerings in Hong Kong. The others were Bank of Communications Ltd., China's fifth-largest lender, and coal producer China Shenhua Energy Co.
China COSCO is a unit of China Ocean Shipping (Group) Co.
"China COSCO is a unit of China Ocean Shipping (Group) Co." which is a division of the Peoples Liberation Army's Navy. (Or so my old neighbor says)
ping
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