Morning:
13°c
HK flop increases doubts over move by HSBC chief
02.10.09
HSBC's Michael Geoghegan may think the future of the financial world lies in Hong Kong rather than London, but another disastrous stock-market flotation there today could suggest otherwise.
Glorious Property Holdings, a property developer in China, saw its shares crash 20% on their debut at the Hong Kong stock exchange.
It is the fifth consecutive float to flop on its first day in the past fortnight as investors remain extremely wary about company valuations in the region. The appalling run of bad floats comes as HSBC chief executive Geoghegan packs his bags to move from London to Hong Kong, reflecting what he described as a shift in the world economy from west to east.
Given the state of the Hong Kong fundraising market, some may now question his timing. “It's a massacre,” said Francis Lun, general manager at Fulbright Securities in Hong Kong. “Right now investors have lost all confidence in new shares and I can't see this changing in the near term.”
Glorious raised £805 million by floating shares. Palm oil giant Wilmar International now says it will delay the flotation of its Chinese operations.
