Chinalco Unit Drops 7% in HK Debut After $400 Million IPO
Shares of Chinalco Mining Corp International, a unit of China's top aluminium group, Aluminum Corp of China (Chinalco), fell as much as 11.4 percent on their Hong Kong debut on Thursday, a week after pricing its $400 million initial public offering near the mid-point of an indicative range.
Shares in the company fell 7.4 percent to HK$1.62 in early trading and dropped as low as HK$1.55, compared with a 0.6 percent decline in the Hang Seng Composite Index Materials. The Chinalco unit priced the offering last week at HK$1.75 per share, after marketing it in a range of HK$1.52 to HK$1.91.
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The IPO, the biggest in Hong Kong in almost a month, has been closely monitored by deal-starved investment bankers and prospective IPO candidates to gauge whether investors are ready to jump back into the market after a dismal year for new listings in 2012.
The steep decline in Chinalco shares came just hours after the U.S. Federal Reserve said growth in U.S. economic activity stalled in recent months, raising concerns demand for minerals and energy assets could wane.
Chinalco Mining, which is developing a copper-molybdenum-silver mine in central Peru, offered 1.76 billion new shares, putting the total deal at HK$3.1 billion ($400 million), the biggest IPO in Hong Kong since China Machinery Engineering Corp raised $575.4 million in mid-December.