Sinopec Engineering’s Hong Kong IPO fizzles

Dashes hopes of Hong Kong again becoming top IPO hub.

Sinopec Engineering (Group) Co Ltd, a unit of China's largest refiner, had a disappointing market debut after raising US$1.8 billion in Hong Kong's biggest IPO this year.

Sinopec Engineering shares fell to HK$10.46 in early afternoon trade compared with the IPO price of HK$10.50 after opening at HK$10.70. The deal was priced near the bottom of an indicative range of HK$9.80-HK$13.10 per share last week.

The lackluster performance cast doubt on a nascent recovery in IPO issuance in Hong Kong as investors remained cautious because of a weaker stock market. The IPO was closely watched by other companies planning to tap capital markets.

On Wednesday, China Galaxy Securities Co Ltd gained 6 percent in its Hong Kong debut after raising $1.1 billion last week, reviving hopes for a recovery in an IPO market that had trailed countries including Iraq in issuance earlier this year.

Sinopec Engineering is controlled by China Petrochemical Corporation, the state-owned integrated oil giant also known as Sinopec Group that is also the parent of China Petroleum and Chemical Corporation.