SITC International Holdings Co, a Chinese company that provides marine shipping services, fell on its first day of trading in Hong Kong as investors sold stocks on concern a slowdown in trade may hurt growth.
The stock dropped 7.9 per cent from its initial public offering (IPO) price to HK$4.40 at the 12.30pm trading break in Hong Kong, after tumbling as much as 10 per cent. The benchmark Hang Seng Index rose 1.1 per cent.
SITC sold 650 million shares, or a 25 per cent stake, at HK$4.78 apiece, raising about HK$2.98 billion (S$503 million) after deduction of fees.
SITC, which focuses mainly on container shipments within Asia, may face weaker demand as China's export growth eases.
Even as growth in Asia outpaces the rest of the world, slowing consumer demand in the United States and Europe for Asian-made products may damp rates and demand for shipping services, according to Francis Lun, general manager at Fulbright Securities Ltd.
'Demand in the shipping industry is seasonal and companies face high costs,' Mr Lun said from Hong Kong. 'The fluctuations in shipping rates don't make this an attractive stock investment.'
China's exports rose 34.4 per cent in August, slowing from 38.1 per cent growth a month earlier. Its economy expanded 10.3 per cent in the second quarter, less than the 11.9 per cent for the three months through March, and may slow further for the rest of this year, according to estimates in a Bloomberg survey of economists.
SITC's net income in the six months to June 30 rose almost six-fold to US$51 million and sales gained 40 per cent to US$400.7 million.
The company's cost of sales in the first half increased 21 per cent to US$327.7 million, according to its prospectus.
'It's normal for stock prices to fluctuate and prices to fall,' SITC chairman Yang Shaopeng said at an IPO ceremony in Hong Kong yesterday. 'The company will continue to expand its fleet and tap demand growth for shipping within Asia.'
The stock dropped 7.9 per cent from its initial public offering (IPO) price to HK$4.40 at the 12.30pm trading break in Hong Kong, after tumbling as much as 10 per cent. The benchmark Hang Seng Index rose 1.1 per cent.
SITC sold 650 million shares, or a 25 per cent stake, at HK$4.78 apiece, raising about HK$2.98 billion (S$503 million) after deduction of fees.
SITC, which focuses mainly on container shipments within Asia, may face weaker demand as China's export growth eases.
Even as growth in Asia outpaces the rest of the world, slowing consumer demand in the United States and Europe for Asian-made products may damp rates and demand for shipping services, according to Francis Lun, general manager at Fulbright Securities Ltd.
'Demand in the shipping industry is seasonal and companies face high costs,' Mr Lun said from Hong Kong. 'The fluctuations in shipping rates don't make this an attractive stock investment.'
China's exports rose 34.4 per cent in August, slowing from 38.1 per cent growth a month earlier. Its economy expanded 10.3 per cent in the second quarter, less than the 11.9 per cent for the three months through March, and may slow further for the rest of this year, according to estimates in a Bloomberg survey of economists.
SITC's net income in the six months to June 30 rose almost six-fold to US$51 million and sales gained 40 per cent to US$400.7 million.
The company's cost of sales in the first half increased 21 per cent to US$327.7 million, according to its prospectus.
'It's normal for stock prices to fluctuate and prices to fall,' SITC chairman Yang Shaopeng said at an IPO ceremony in Hong Kong yesterday. 'The company will continue to expand its fleet and tap demand growth for shipping within Asia.'
