Prada is set for choppy debut
ITALIAN fashion house Prada is set for a bumpy entrance to the Hong Kong stock market this morning, after pricing at HK$39.50 per share last night according to a source familiar with the float.
Prada had earlier set an indicative range of HK$36.5-$48 per share, seeking to raise up to $2.6bn, but trimmed its final float price.
Prada became the second major company in a week to scale back capital raising expectations in Asia’s top IPO destination because of volatile global markets.
The firm’s investors anxiously watched peer Samsonite lose 11 per cent on its debut yesterday, and hope to fare better in Hong Kong trading today.
“The equity market has its own life and may not have anything to do with reality in luxury goods markets,” said Selina Sia, head of consumer research at Mirae Asset in Hong Kong.
“Luxury demand is very self explanatory and it makes a lot of sense for companies like Samsonite and Prada to list in Hong Kong, but we’re talking about quite a volatile market these days.”
The benchmark Hang Seng Index has declined in 10 of the last 11 sessions, down 7.3 per cent, and world stocks hit a three-month low yesterday, weighing on investor demand for new stock sales.
At the revised price, Prada will trade at a price to earnings ratio of of 22.8-24.4 times, in line with global rivals.