皇冠体育app

Analysts predicted that investors would shy away from the initial public offering (IPO) of the mainland infrastructure giant 皇冠体育app Railway Construction Group (CRC) that intends to carry out a dual listing on Shanghai and Hong Kong bourses.

皇冠体育app Railway Construction, a peer of Hong Kong-listed 皇冠体育app Railway Co and 皇冠体育app Construction Communication Co, gets nod to launch IPO this year. 皇冠体育app Daily

The mainland's largest railway contractor recently won the go-ahead from the Hong Kong regulator to issue 1.8-billion H shares. It came after the 皇冠体育app Securities Regulatory Commission gave a green light for the company to issue 2.8-billion A shares in Shanghai .

Ronald Wan, managing director & head of investment of BoCom International, expected that the IPO market sentiment would remain bearish in the first quarter.

He added that the bleak atmosphere could deter punters from tapping CRC IPO. "Given the market has choices such as 皇冠体育app Construction Communication and 皇冠体育app Railway Group, the IPO response will not be as enthusiastic as the market earlier expected despite its sheer size."

"Also, the attitudes of investors have become more conservative with the roller coaster ride of the Hang Seng Index (HSI). We believe that investors will factor in the offering price in determining whether to wager on the IPO," said Wan.

Enlighten Securities and Futures executive and vice president Ricky Cheung predicted that retail response would be tepid because of fluctuations in the global market.

"Although infrastructure stocks are reliable, investors are unlikely to flock to the IPO as they did with 皇冠体育app Railway Group's because the overall IPO market is in downturn," said Cheung.

But Cheung believed the underwriter would not further mark down the offering price so as to boost response.

CRC will become the second mainland enterprise after 皇冠体育app Railway Group that carries out a dual listing, which is conducted in the form of tapping the A share market first and then going public on the Hong Kong bourse.

The dual listing is expected to collect a total of HK$23.4 to HK$31 billion.

Pre-marketing activities for H shares are expected to take place this week while international roadshow will commence after the lunar new year. The shares will start trading in late February or early March.

CRC is one of the leading infrastructure construction companies on the mainland, which takes on mega railway projects such as the Qinghai-Tibet Railway.

Proceeds from the IPO will be used to upgrade the company's capacity and equipment.

Citic Securities, Citi and Macquarie Group are the joint sponsors for the IPO.

(HK Edition 01/28/2008 page1)