When someone shares with you something of value, you have an obligation to share it with others.
Wednesday, 8 April 2009
Silver Base falls on debut after popular IPO
Shares in Silver Base Group, which distributes products made by Chinese liquor maker Wuliangye Yibin, fell 12 per cent in their Hong Kong trading debut, weighed down by a broader market slump.
Shares in Silver Base Group, which distributes products made by Chinese liquor maker Wuliangye Yibin, fell 12 per cent in their Hong Kong trading debut, weighed down by a broader market slump.
Silver Base, which also sells cigarettes, raised US$133 million in an initial public offering that drew strong investor demand amid a recent market rally, but was pressured on its first day of trade by a broader global decline in stock markets.
Its shares opened at HK$3.05 before climbing as high as HK$3.37, compared with an IPO price of HK$3.45 each, which came at the top of an indicated range after drawing robust demand.
By the midsession, Silver Base shares were at HK$3.12, 9.6 per cent below the IPO price. The Hang Seng Index was down 4 per cent.
Silver Base priced its IPO last week shortly after mainland online gaming firm Changyou.com sold its own US$120 million Nasdaq IPO at the top of an indicated range on strong oversubscription, prompting expectations that the long-frozen IPO markets may finally be thawing.
“Given the atmosphere today, it’s hard to trade up the stock,” said Jackson Wong, investment manager at Tanrich Securities, who expects the stock to benefit from rising domestic consumption in the mainland.
“This is a good brand and retail story so near-term prospects are pretty good,” he said.
The top-of-range pricing valued Silver Base at 10.45 times the pro forma per-share earnings forecast of the company of at least HK$0.33 each for the year just ended in March.
By comparison, Tsingtao Brewery, the country’s best-known beer maker, trades at 26.8 times forecast last year earnings in Hong Kong.
Silver Base and Changyou.com’s IPOs have encouraged other mainland firms to consider public offerings.
“Every CEO in our IPO pipeline has been calling, saying: ‘I want to be next’,” said a senior equity capital markets banker in Hong Kong who declined to be identified.
But IPOs can require long lead times to execute and not every issuer is ready, the banker said.
Markets, meanwhile, need a prolonged period of stability and companies need to be willing to price their deals attractively in order for new issuance to pick up, bankers and investors said.
Globally, IPO volumes are down 96 per cent so far this year, according to Thomson Reuters data.
1 comment:
Silver Base falls on debut after popular IPO
Reuters in Hong Kong
8 April 2009
Shares in Silver Base Group, which distributes products made by Chinese liquor maker Wuliangye Yibin, fell 12 per cent in their Hong Kong trading debut, weighed down by a broader market slump.
Silver Base, which also sells cigarettes, raised US$133 million in an initial public offering that drew strong investor demand amid a recent market rally, but was pressured on its first day of trade by a broader global decline in stock markets.
Its shares opened at HK$3.05 before climbing as high as HK$3.37, compared with an IPO price of HK$3.45 each, which came at the top of an indicated range after drawing robust demand.
By the midsession, Silver Base shares were at HK$3.12, 9.6 per cent below the IPO price. The Hang Seng Index was down 4 per cent.
Silver Base priced its IPO last week shortly after mainland online gaming firm Changyou.com sold its own US$120 million Nasdaq IPO at the top of an indicated range on strong oversubscription, prompting expectations that the long-frozen IPO markets may finally be thawing.
“Given the atmosphere today, it’s hard to trade up the stock,” said Jackson Wong, investment manager at Tanrich Securities, who expects the stock to benefit from rising domestic consumption in the mainland.
“This is a good brand and retail story so near-term prospects are pretty good,” he said.
The top-of-range pricing valued Silver Base at 10.45 times the pro forma per-share earnings forecast of the company of at least HK$0.33 each for the year just ended in March.
By comparison, Tsingtao Brewery, the country’s best-known beer maker, trades at 26.8 times forecast last year earnings in Hong Kong.
Silver Base and Changyou.com’s IPOs have encouraged other mainland firms to consider public offerings.
“Every CEO in our IPO pipeline has been calling, saying: ‘I want to be next’,” said a senior equity capital markets banker in Hong Kong who declined to be identified.
But IPOs can require long lead times to execute and not every issuer is ready, the banker said.
Markets, meanwhile, need a prolonged period of stability and companies need to be willing to price their deals attractively in order for new issuance to pick up, bankers and investors said.
Globally, IPO volumes are down 96 per cent so far this year, according to Thomson Reuters data.
Post a Comment