UPDATE 1-Shandong Chenming Paper falls 11 pct in HK IPO debut

(For an expanded IPO diary, please click <HK/IPOMENU>)

(Updates share price and adds brokerage comment and details)

By Kennix Chim

HONG KONG, June 18 (Reuters) - Shares in Shandong Chenming Paper Holdings Ltd (1812.HK) fell 10.6 percent in their market debut on Wednesday, in line with expectations, after it raised $410 million in a Hong Kong initial public offering.

Investors' appetite for new listings in Hong Kong remains weak amid volatile global markets and concern over rising inflation, with the benchmark Hang Seng Index .HSI down 4.8 percent in June and 16 percent so far this year.

"I am not surprised about the lacklustre trading debut for Chenming. Investors are sceptical on equity trading, especially IPOs, which are not a guaranteed investment anymore," said Ben Kwong, chief operating officer at KGI Asia.

Shares in Chenming Paper (000488.SZ) (200488.SZ) opened at HK$7.40 and ended the morning session at HK$8.05, down 10.6 percent from their IPO price of HK$9.00 per share, which was at the low end of its indicated range.

Hong Kong stocks reversed course to finish the morning up 1.27 percent on Wednesday.

Guotai Junan Securities and Macquarie (MQG.AX) sponsored Chenming's deal.

Chenming Paper is the first Chinese-listed company with all three types of shares -- yuan-denominated A shares, foreign currency B shares and Hong Kong-listed H shares.

Its A shares have fallen 30 percent since it started its IPO marketing roadshow on May 26, and closed at 11.74 yuan (US$1.7) on Wednesday morning.

The Chinese paper manufacturer, which offered 355.7 million shares, or 17.25 percent of its enlarged share capital, was 1.42 times covered in its Hong Kong retail public offering.

Chenming's offer price values the company at a multiple of 9.6 times 2008 earnings forecast by its sponsors.

By comparison, top Chinese packaging paper supplier Nine Dragons Paper (Holdings) Ltd (2689.HK) trades at 11.6 times 2008 forecast earnings, while Lee & Man (2314.HK) trades at 10.6 times.

Four companies are still willing to brave the weak market to raise a combined $2.1 billion, including Macau tycoon Stanley Ho's casino flagship Sociedade de Jogos de Macau and Glorious Property, which plan to raise $600 million and $1 billion, respectively.

Chinese sportswear maker Xdlong and China Shanshui Cement plan to raise $200 million and $305 million, respectively.