Glorious Is Fifth Flop in Hong Kong IPO ‘Massacre’

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Bloomberg Glorious Property Holdings Ltd. fell 15 percent on its first day of trading in Hong Kong, the fifth straight debut slump for an initial public offering in the city. The stock dropped to HK$3.76 at the 4 p.m. close after slumping as much as 20 percent from the HK$4.40 offer price. Glorious Property last week raised HK$9.9 billion ($1.28 billion) in the largest Hong Kong IPO by a Chinese property company in two years. The developer joins four companies, including China South City Holdings Ltd., in falling on the first day in the past two weeks. The declines have heightened investors’ concern the market’s appetite for offerings is waning as Wynn Macau Ltd. prepares to start trading on Oct. 9 after raising $1.63 billion. “It’s a massacre,” Francis Lun, general manager at Hong Kong-based brokerage Fulbright Securities Ltd., said in an interview. “Right now investors have lost all confidence in new shares and I can’t see this changing in the near term.” Hong Kong’s benchmark Hang Seng Index, which has rallied 80 percent from a four-month low on March 9, fell 3.1 percent this week, the biggest drop since the five days ended Aug. 21. Wilmar International Ltd., the world’s biggest palm oil trader, said Sept. 30 it hasn’t decided on the timing of a Hong Kong share sale of its China assets and is monitoring market conditions. Wilmar is delaying the Hong Kong sale to mid-October or later from Oct. 5 initially, FinanceAsia reported on its Web site Sept. 30. Next IPOs Glorious Property “is the latest in a line of IPOs that has performed worse than people were expecting,” said Andrew Sullivan, a sales trader at Mainfirst Securities Hong Kong Ltd. “The next IPOs will probably have to be priced more attractively.” JPMorgan Chase & Co., Deutsche Bank AG and UBS AG were the global coordinators in the Glorious Property IPO. Companies including Wynn Macau and Yingde Gases Group Co., China’s largest independent onsite supplier of industrial gases, will start trading on the Hong Kong exchange next week, according to Bloomberg data. Wynn Macau, the casino company led by billionaire Stephen Wynn, is scheduled to start trading in Hong Kong on Oct. 9. It raised HK$12.6 billion ($1.63 billion) selling shares at HK$10.08 apiece, the top end of the price range. Yingde Gases, its controlling shareholders, bank and fund investors on Sept. 30 priced shares in its HK$3.17 billion initial public offering at HK$7 each, according to a share sale document. It earlier offered the shares at HK$6.03 to HK$7.91 apiece. The stock is due to start trading on Oct. 8. Earlier Debuts China South City, a developer of logistics centers, tumbled as much as 30 percent on its Hong Kong debut on Sept. 30. China Lilang Ltd., owner of the nation’s biggest men’s clothing brand, dropped as much as 6.9 percent, and Peak Sport Products Co. declined as much as 18 percent on their first days. Metallurgical Corporation of China Ltd., which helped construct Beijing’s “Bird’s Nest” Olympic stadium, fell as much as 15 percent on its Sept. 24 trading debut before closing down 12 percent. To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it