China Railway IPO set to buck trend
Hong Kong: According to some sources, the Hong Kong retail portion of China Railway Construction's initial public offering was at least 250 times oversubscribed by Wednesday's deadline, reported Business Standard. The Shanghai composite index has lost nearly a third in value since October, and the Hang Seng index more than a quarter. The flotation is being watched as an indication of the appetite for IPOs in the two financial centers. As companies raised a combined $60 billion through issuing shares in mainland China and Hong Kong this year, there have been few signs that suggest 2008 could see a repeat of last year's level of activities. CRC, previously the railway-building unit of the People's Liberation Army, is trying to raise $5.44 billion from a dual listing in Shanghai and Hong Kong. The mood was further soured by the disappointing debut of Reliance Power's $3 billion IPO in India last month. The strong public demand in Hong Kong would likely trigger a 25 percent increase in the number of shares offered to individuals under a "clawback" provision. CRC has already raised Rmb22.25 billion ($3.1 billion) by selling 2.45 billion shares at Rmb9.08 each, the top of the indicated range, to trade in Shanghai.