Chinese retail giant surges 47% on debut
China's top hypermarket operator Sun Art Retail group soared as much as 47 percent on its Hong Kong trading debut Wednesday, after raising $1.06 billion from its initial public offering.
Shares in the retail giant -- backed by France's Groupe Auchan SA -- touched HK$10.58 ($1.36) at one point, well above its HK$7.20 IPO price, before easing slightly to close at HK$10.12. The benchmark Hang Seng Index closed 0.13 percent lower.
The retailer has bucked a recent downturn in the Hong Kong IPO market, the world's biggest, and said its share sale was 41.1 times oversubscribed, defying a batch of weak new listings in the Asian financial hub.
"It is really surprising. It is absolutely amazing that the stock can shoot up more than 40 percent," said Francis Lun, managing director of financial services firm Lyncean Holdings.
"This is certainly good news for companies planning to list in Hong Kong soon because the IPO market has been quite weak recently," he told AFP.
Some firms have decided to delay or cancel their listings citing turmoil global markets.
Italian luxury goods maker Prada made a lacklustre debut in the financial hub in June after raising a lower-than-expected $2.14 billion in its IPO.
And Australian miner Resourcehouse also shelved an IPO originally slated to raise as much as $3.6 billion, citing weak market conditions.
Sun Art Retail Group was originally scheduled to make its Hong Kong debut on July 15 but it was delayed after it overstated its earnings per share in its IPO prospectus. It later issued a supplementary prospectus.
The retailer, previously known as Sun Holdings Greater China Ltd, is a joint venture between Taiwanese supermarket-to-cement conglomerate Ruentex Group and France's Groupe Auchan.
The Chinese firm has said it plans to use half of the share sale proceeds to open 51 stores in mainland China by the end of next year. Sun Art currently has 197 hypermarkets in the country.
© 2011 AFP