Samsonite International, the world's biggest luggage maker, has dropped 11 per cent in its Hong Kong trading debut, underscoring tepid investor appetite for initial public offerings as global markets struggle.
Samsonite's slump is the latest in a string of weak Hong Kong IPO performances as China's strong growth shows signs of weakening and it bodes ill for the impending share sale of Italian fashion house Prada.
"Of course you have to attribute that to the weak sentiment in the market and in the meantime people won't be too interested in IPOs," said Alex Wong, a director with Ample Finance Group.
Prada had filed to raise up to $2.6bn (£1.6bn) but has now narrowed the price range of its offering, cutting the mid-point just over 3 per cent. It is due to price the deal on Friday, while China Everbright Bank plans a $6bn Hong Kong IPO early in July.
Samsonite shares fell to HK$13.14 in mid morning, but traded as low as HK$12.96 after pricing at HK$14.50 a share, the bottom of a revised indicative range.
The weak debut comes as the benchmark Hang Seng Index has declined in ten of the last 11 sessions, down nearly seven per cent and weighing on investor demand for new stock sales.
Of the largest IPOs in Asia this year only MGM China posted first-day gains, rising a tepid 1.8 percent, while big names including commodities trader Glencore and top China wind turbine maker Sinovel fell.
Despite the poor debut, Samsonite's chief executive Tim Parker said during a ceremony at the Hong Kong stock exchange that he is optimistic about the long-term outlook for the stock and expansion in fast-growing Asia.
"The markets are very volatile at the moment, so I feel this is a pretty good way to open actually. I'm not at all displeased," said Parker, who was toting a scarlet-colored Samsonite suitcase with an emblem that said "God of Luggage" in English and Cantonese.
City A.M. Reporter