Cinda shares surge ahead of HK debut

Reuters

Hong Kon

Shares in China Cinda Asset Management Co jumped as much as 17.3% in gray market trading yesterday, as retail investors who missed out on this year’s biggest Asia Pacific IPO bought the stock on the eve of its listing. Strong gray market gains usually point to higher opening prices when the stock officially starts trading on the Hong Kong Stock Exchange today.

“We are expecting Cinda to jump 10-15% at least from their IPO price at its debut tomorrow. We will advise clients to take some profit if it jumps 20%,” said Jackson Wong, Hong Kong-based vice-president for equity sales at Tanrich Securities.

China Cinda, the nation’s biggest distressed debt manager, raised $2.5bn in one of the hottest initial public offerings of the year, giving a much-needed boost to Hong Kong’s IPO market.

The IPO was priced at the top of its HK$3.00-3.58 marketing range. The stock climbed as high as HK$4.20 (54 US cents) in the gray market compared with the IPO price of HK$3.58, according to PhillipMart, the pre-listing trading platform of Phillip Securities in Hong Kong.

At the Bright Smart Securities pre-IPO platform, China Cinda shares changed hands at HK$4.12 each and traded as high as HK$4.13. China Cinda’s IPO was swamped by orders from small investors, with the retail portion generating more than 161 times demand than the shares on offer, a company filing showed yesterday.