BOCOM debuts after dull showing in gray marketBusiness | Carrie Chen May 19, 2017
The investment banking arm in Hong Kong of Bank of Communications (3328) rose 1.9 percent to HK$2.73 from its IPO price of HK$2.68 on Phillip Securities' trading platform. It meant a paper gain of only HK$50 for a minimum lot of 1,000 shares.
BOCOM closed 0.37 percent higher at HK$2.69 at the trading floor of Bright Smart Securities.
The investment bank aims to raise up to HK$1.68 billion from the sale of 667 million shares.
It brought on board five cornerstone investors who subscribed to a combined HK$645 million worth of shares.
They are Kaiser Private Equity Fund SPC, Woo Po-shing, Taiping Trustees, Da Cheng International Asset Management and Shandong Gold Financial Holdings Group (Hong Kong).
BOCOM chairman and executive director Tan Yueheng said earlier that the bank would focus mainly on strengthening its business and recruiting professionals in the near future. It also intends to expand its overseas business.
Tan said he was not worried over BOCOM International shares performing poorly after its debut, saying it was different from other mainland brokers listed in the SAR."We are a broker in the banking system and our capital market platform complements that of Bank of Communications," he said.
Since Bank of Communications has been in Hong Kong for more than 80 years, it is treated as a local bank by Hongkongers, he said. BOCOM International is therefore different from other mainland brokers.
It will use 45 percent of the net IPO proceeds on margin financing, 15 percent on asset management and advisory and 10 percent on investment and loans, according to its IPO prospectus.
Meanwhile, local apparel supplier Speed Apparel Holding and local contractor Hao Bai International are closing their retail books today. Their shares will later trade on the Growth Enterprise Market.
Speed Apparel generated margin orders worth HK$1.9 billion and its IPO was oversubscribed by 232 times. Hao Bai received margin orders worth only HK$12.3 million, far below its retail tranche target of HK$84.5 million.