HONG KONG May 22 China Galaxy Securities Co Ltd
rose as much as 11.3 percent in its trading debut on
Wednesday after raising $1.1 billion in a Hong Kong IPO,
underscoring a surge in retail investors' demand for new
listings in the city.
The debut of China's seventh-biggest brokerage, and that of
Sinopec Engineering (Group) Co Ltd on Thursday, will
be bellwethers for a slew of Hong Kong offerings in the coming
China Galaxy shares jumped to HK$5.78 shortly after opening
and traded as high as HK$5.90, up from the IPO price of HK$5.30
per share. The benchmark Hang Seng index was little
changed at 0504 GMT.
Trading in Hong Kong's securities and derivatives markets
was delayed on Wednesday because of a severe rainstorm warning,
pushing back China Galaxy's debut to the early afternoon.
China Galaxy priced its $1.1 billion initial public offering
near the bottom of an indicative range of HK$4.99-HK$6.77 per
share last week. The IPO was the second biggest in Hong Kong
this year, behind Sinopec Engineering's $1.8 billion listing,
also last week.
Demand from retail investors was nearly 30 times the number
of shares on offer, with the institutional tranche of the IPO
"significantly over-subscribed," China Galaxy said in a filing
The China Galaxy and Sinopec Engineering deals underscore a
pick-up in activity after IPO issuance in Asia ex-Japan plunged
56 percent to $3.3 billion in the first quarter. That was the
worst start to a year for new share listings since the first
quarter of 2009, according to Thomson Reuters data.
After being the global IPO hub for several years, the city
had $7.72 billion worth of deals in 2012, its lowest volume
since the 2008 global financial meltdown.
The brokerage is controlled by Galaxy Financial Holdings,
which is owned by Central Huijin, a unit of sovereign wealth
fund China Investment Corp.
China Galaxy's IPO secured commitments for $360 million
worth of shares from seven investors including Malaysian
sovereign wealth fund Khazanah Nasional, insurers AIA
Group and Sino Life Insurance, and a unit of Sinopec
ABC International, China Galaxy International, Goldman Sachs
, JPMorgan and Nomura were hired as joint
global coordinators of the IPO, with another 16 banks also
acting as joint bookrunners. The number of underwriters was a
record for Hong Kong's IPO market, in sign of lean times for
Asia's once-booming stock issuance industry.