November 8, 2017 / 12:58 AM / a year ago

China Literature jumps as much as 67 pct in gray market trade

HONG KONG, Nov 8 (Reuters) - Shares of China Literature , Tencent Holdings’ online publishing arm, closed more than 60 percent above above their IPO price in gray market trade ahead of what market watchers anticipate will be a blockbuster debut on Wednesday.

China Literature’s IPO raised $1.1 billion after China’s biggest e-book company priced at the top of its marketed range of HK$48–HK$55, Tencent said in a statement on Tuesday.

Brokerages Phillip Securities and Bright Smart said the shares closed at HK$89.65 and HK$90.40, respectively, in gray market trade on Tuesday. That represents a jump of more than 60 percent above its IPO price.

Both brokerages said the shares traded as high as HK$92.00, a climb of 67 percent.

“Profit-taking interest at over HK$90 is expected to cap the upside while the valuation of the stock is also a bit too high,” said Stanley Chik, research director at Bright Smart Securities.

China Literature, which is 62 percent owned by Tencent , has a business akin to Inc’s Kindle Store, operating a platform with 9.6 million literary works from 6.4 million authors.

Reporting by Donny Kwok; Editing by Anne Marie Roantree and Edwina Gibbs

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