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China CNR makes tepid debut
By Pan Xiaoyi |
December 30, 2009, Wednesday
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Print Edition
Print Edition
LOCOMOTIVE maker China CNR Corp rose a feeble 2.34 percent yesterday to notch the weakest debut performance in Shanghai trading since a 10-month ban on initial public offerings was lifted in June.
China CNR, one of the country's two big train makers, became the second stock to post a gain of less than 10 percent on its first trading day after China Merchants Securities Co, which rose 8.42 percent on its debut in Shanghai in mid-November.
Analysts attributed the weak debut performance to institutional investors' waning enthusiasm for speculation in IPOs as well as the recent sluggish stock market as retail investors adopted a cautious stance ahead of the year end.
"Big chips that were listed recently have shown subdued performance, which in turn affected investor interest in IPOs," said Wu Yan, an analyst with Daton Securities Co. "But the slack debut performance was reasonable although there were hopes for a gain of around 10 percent."
China CNR, which raised 13.9 billion yuan (US$2 billion) in the fourth-largest IPO in China this year, rose as much as 6.5 percent to 5.92 yuan during trading from the offering price of 5.56 yuan. It closed at 5.69 yuan yesterday. Comparatively, the average first-day gain for stocks on their debut in China this year is 76 percent, according to Bloomberg.
"The market has come under pressure as investors took a wait-and-see attitude with the end of the year nearing while the increased pace of approved IPOs drained market liquidity," said Wu.
Analysts also said the new stocks performed weakly because fewer institutional investors were keen to lift the debut prices since they subscribed offline and were not allowed to sell the shares immediately to take profit.
China CNR, one of the country's two big train makers, became the second stock to post a gain of less than 10 percent on its first trading day after China Merchants Securities Co, which rose 8.42 percent on its debut in Shanghai in mid-November.
Analysts attributed the weak debut performance to institutional investors' waning enthusiasm for speculation in IPOs as well as the recent sluggish stock market as retail investors adopted a cautious stance ahead of the year end.
"Big chips that were listed recently have shown subdued performance, which in turn affected investor interest in IPOs," said Wu Yan, an analyst with Daton Securities Co. "But the slack debut performance was reasonable although there were hopes for a gain of around 10 percent."
China CNR, which raised 13.9 billion yuan (US$2 billion) in the fourth-largest IPO in China this year, rose as much as 6.5 percent to 5.92 yuan during trading from the offering price of 5.56 yuan. It closed at 5.69 yuan yesterday. Comparatively, the average first-day gain for stocks on their debut in China this year is 76 percent, according to Bloomberg.
"The market has come under pressure as investors took a wait-and-see attitude with the end of the year nearing while the increased pace of approved IPOs drained market liquidity," said Wu.
Analysts also said the new stocks performed weakly because fewer institutional investors were keen to lift the debut prices since they subscribed offline and were not allowed to sell the shares immediately to take profit.
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