Sinopec Engineering, amidst all the hoopla, opened to a weak demand in its market debut Thurday. Previously, the firm had raised US$1.8 billion in the largest IPO this year at the Hong Kong bourse. The performance of this highly touted share cast a cloud on the recovery of the IPO market in Hong Kong, seeing that investors remained bullish on the market.
The IPO by Sinopec Engineering (Group) Co. Ltd, which is a unit of the largest refining company in China, has been in the radar of many other companies planning a plunge into the capital markets. Last Wednesday, China Galaxy Securities Co Ltd had increased by 6% after it raised US$1.1 billion just last week. The performance of the China Galaxy stock had increased hopes for a recovery in the IPO market that had been behind many other countries in its issuances for this year alone.
The Hang Seng index fell by 1.6% in early afternoon trade today, following two previous days of falling share values. This is weighing down on the investor view on Sinopec Engineering and the market's general sentiment towards IPOs to be listed in the bourse.
Clearly, the differing performances of China Galaxy and Sinopec Engineering show the very fickle nature of the city's capital markets where market sentiment is driven by individual retail investors.
Join the Conversation