CITIC 1616 jumps 67% on first day
Shares in CITIC 1616, a spin-off of conglomerate CITIC Pacific, surged 67 percent on its trading debut in Hong Kong on Tuesday.
Shares in the telecom services firm closed at HK$4.31, while the benchmark Hang Seng Index gained 0.97 percent to 20,002 points.
The stock began trading at HK$4.54. It revised to HK$4.31 at the midday close. In the afternoon session, the price hovered between HK$4.3 and HK$4.54. It finally settled at HK$4.31 per share, increasing 67 percent, or HK$1.73.
A total of 365 million shares changed hands, with a daily turnover of HK$1.61 billion.
CITIC 1616 sold 820 million shares in its initial public offering, raising HK$485 million. The retail tranche received an overwhelming response and was 961 times oversubscribed. The offer price was set at the top of the indicative range at HK$2.58 per share.
The Government of Singapore Investment Corp and Britain's Ashmore Investment Management committed $35 million and $25 million respectively for the institutional offer, while former chairman of Esprit Holdings Ltd Michael Ying and Hong Kong tycoon Nina Kung each committed $15 million.
Market watchers said CITIC 1616's share price was set relatively high to its earnings, compared with its peers.
CITIC Pacific Managing Director Henry Fan Hung-ling said that although the high price-to-earnings ratio placed a lot of pressure on the company's management, the parent group would give full support for the listing.
Fan added that he was satisfied with its performance on the first trading day.
CITIC 1616 Chairman Shi Cuiming said the company would strive to explore the Asian and mainland markets.
"Given our strength of having a close relationship with domestic telecommunication operators, the company is able to serve the mainland telecommunication sector with a unique advantage," he said.
Shi dismissed some analysts' suggestions that the stock was only likely to be overweight in the short term. He said many funds had expressed interest in the shares.
(China Daily 04/05/2007 page15)
