Investors rush to grab share of Huatai float

The first-day scramble for subscriptions to the initial public offering of mainland stock brokerage Huatai Securities Co Ltd in Hong Kong reiterates investor confidence in a continued capital market rally, marketmen said on Tuesday.

Huatai, based in Jiangsu province, is offering 1.4 billion new shares in Hong Kong, at an indicative price range of HK$20.68 ($2.69) to HK$24.80 apiece, representing a discount of between 45 percent and 34 percent to the closing price of its Shanghai-listed A shares. The company said it would use the funds raised from the share offering, which commenced in Hong Kong on Tuesday, for its margin finance and lending businesses.

HTSC shares had already surged to the daily limit of 10 percent and reached 30.04 yuan ($4.84) before trading in the scrip was suspended on Tuesday morning. The performance of HTSC and other brokerages were responsible for the market rally, which saw the benchmark Shanghai Composite Index move up by 3.1 percent.