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StanChart gets off to modest start
By Alex Frew McMillan
HONG KONG, China (CNN) -- British bank Standard Chartered suffered no Halloween jitters in its secondary offering in Hong Kong. Its shares ended up HK$87.00 on Thursday, a 3.57 percent rise from its offer price of HK$84.00. However, the shares were sold at a slight discount, and its HK$87.00 close is the equivalent of their closing price on Wednesday in London. Still, it was a workmanlike, albeit unspectacular, showing on a day the overall Hang Seng index fell 1.19 percent. StanChart saw total volume of HK$217.7 million change hands, shares trading in a tight range from HK$86.50 to HK$87.50. CEO Mervyn Davies said the company was happy with the showing. "We are delighted with the result that we have with this issue," he said at the exchange in Hong Kong. Big rise not expectedAnalysts had not expected a big rise, noting that the London shares should already be priced efficiently. They do not expect much movement in the price until the company is added to the Hang Seng index. But its market cap of $12.7 billion means that is likely next year, after the shares have been given a while to trade. It is not an auspicious time for stock sales, with world stock markets only recently rallying off their multiyear lows. China Telecom, the former monopoly phone company in China, was forced to shelve a stock sale of its own on Thursday due to lackluster demand. (Full story) The deal will now be repriced, with the extensive "book building" process of soliciting demand due to begin anew early next week. The failure is an embarrassing flop for what was supposed to be the biggest stock sale in Asia this year and the third biggest in the world. BOC still below debut priceStanChart investors looking for a quick buck by flipping the stock do not have precedent on their side. The Bank of China launched a high-profile stock offering in July, the biggest in the city so far this year. But its shares closed Thursday at HK$7.95, a 6.5 percent drop from its official offer price of HK$8.50. (BOC debut) They're still below even the discounted price given to man-in-the-street retail investors to spark interest. The buzz has been more of a whisper about StanChart, both because it has a smaller presence and because the stock already trades in Britain. London-based StanChart, as the bank is known, gets around 60 percent of its profits in Asia. It is known for specializing in emerging markets that other banks prefer not to touch. The bank wanted to raise its profile in Hong Kong, where it is the fourth-biggest retail bank. It also raised total cash of HK$2.94 billion ($377 million), some of which it has said it plans to use to buy back shares in London to prevent dilution. It had first planned the offering for last year but deferred it after the September 11 attacks and the concomitant drop in the markets.
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