UPDATE 2-Retail investors seek refunds of Stanley Ho IPO shares

(Adds fund manager comment on preview of SJM's trading debut) (For an expanded IPO diary, click <HK/IPOMENU>)

By Kennix Chim and Tony Munroe

HONG KONG, July 15 (Reuters) - Tycoon Stanley Ho's Macau casino flagship is set to make its trading debut on Wednesday in a dismal market, after the company said that individual investors withdrew applications for more than half of their IPO shares following a delay in the listing last week.

Sociedade de Jogos de Macau (SJM), which raised $494 million, also said it plans to proceed with its Wednesday debut regardless of the outcome of a legal claim by Ho's estranged sister, Winnie Ho, who is trying to stop the deal.

Hong Kong's Court of Appeal dismissed a claim later on Tuesday by Winnie Ho seeking to have the listing halted. Her spokeswoman, Donna Yau, said Winnie Ho planned to bring her case to Hong Kong's Court of Final Appeal.

SJM, the 86-year-old Stanley Ho's gaming flagship, has had a tumultuous journey to its initial public offering. The deal's timing could hardly be more difficult.

Hong Kong's benchmark Hang Seng Index .HSI slid 3.8 percent to its lowest close in nearly four months, and has lost 18 percent since May in volatile trade as investors fret over rising inflation.

"I think SJM will have lacklustre trading debut tomorrow, because of a poor stock market and investors worried about the litigation risk it faces in the future," said Adam Tam, a fund manager at Pacific Sun Investment Management.

SJM (0880.HK: Quote, Profile, Research, Stock Buzz) delayed its trading debut from last week amid Winnie Ho's court challenge, and offered investors the option of getting their money back. Winnie Ho lost in last week's court ruling, but has filed an appeal. [ID:nHKG132458]