Sunshine Insurance shares open flat in Hong Kong debut (updated)

Sunshine Insurance

09/12/2022 01:42

(Adds deal detail)
    By Scott Murdoch
       Dec 9 (Reuters) - China's Sunshine Insurance Group Co
 6963.HK  shares opened in line with their issue price on Friday
in the company's Hong Kong Stock Exchange debut.
    The company raised $863 million by selling its shares at
HK$5.83 each in its initial public offering (IPO).
        The broader market, Hong Kong's Hang Seng Index  .HSI ,
was up 0.2% early in Friday trading.
        In its prospectus, Sunshine Insurance said it had life,
health, accident, property, and casualty insurance products
under its brands. It had 416.3 billion yuan ($58.3 billion) in
total investment assets as of June 30 this year.
        The IPO is the second largest in Hong Kong so far in
2022, as the city's financial markets struggle with a low number
of new share sales. 
        Companies have raised nearly $7 billion so far in IPOs
this year, making it the worst year in a decade, according to
Refinitiv data.
        Russia's war against Ukraine, rising interest rates and
soaring energy prices and inflation has dented the appetite of
investors to buy into IPOs globally.
    Demand from investors to buy into Hong Kong IPOs also
remains weak with the city's retail shareholders not subscribing
for all of the stock on offer to them in Sunshine Insurance's
deal.
        The retail portion was undersubscribed, according to the
company's listing documents, while the institutional tranche was
only 1.34 times covered.
        Hong Kong deals were up to thousands of times
oversubscribed during the market's peak in 2020 as retail and
institutional shareholders fought to gain stock in nearly every
IPO.
    China bottled water maker Nongfu Spring  9633.HK  for
instance was more than 1,148 times oversubscribed when it raised
$1 billion in September 2020.
    The weak demand for IPOs in 2022, especially from Hong
Kong's mom and pop investors, has been attributed to the
majority of new share sales this year trading below their issue
price.
 (Reporting By Scott Murdoch in Sydney and Anne Marie Roantree
in Hong Kong; Editing by Shri Navaratnam and Grant McCool)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))