Asia's largest listing this year opened with a whimper in Hong Kong on Monday, defying the gains seen in other recent initial public offerings (IPO) in the territory.
Huatai Securities, China's largest stock brokerage by trading volume, rose to 26.10 Hong Kong dollars (US$3.37) in early trade, a gain of five percent. Nanjing-based Huatai sold 1.4 billion shares at 24.80 Hong Kong dollars per piece, raising $4.5 billion.
"I was expecting [gains of] 13-20 percent," Jackson Wong, associate director at United Sumsen Securities, told CNBC. "A lot of investors were expecting it to open at about 28-29 Hong Kong dollars."
Analysts attributed the subpar performance partly to retail investors, who own 70 percent of the shares, looking to cash in on the first-day pop. Huatai's offering was also priced at the top end of the range, which explains the poor debut when compared with its Shenzhen-based rival GF securities' Hong Kong listing, he added. GF shares have surged 35 percent since its 3.6 billion Hong Kong dollar listing in April.
Huatai is the latest Hong Kong offering hoping to cash in on the rally in the Chinese stock markets this year. The Hang Seng index is up 16 percent year to date, while the Shanghai Composite, despite a dramatic selloff last week, is up nearly 50 percent.