Shares in Yum China fell more than six per cent this morning after the fast food group made its debut on the Hong Kong market, as investors reacted to uncertainty in global markets.
The Shanghai-based company, which operates KFC, Taco Bell and Pizza Hut restaurants in China, raised $2.2bn (£1.7bn) in the listing having sold nearly 42m shares at HK$412 (£41) each.
Debut trading performances in the Hong Kong market tend to be strong, yet early figures show Yum China hit a low of HK$386.2.
The Hang Seng Index traded 0.15 per cent higher.
Yum China’s market value had been up 1.7 per cent yesterday before its stock decreased 8.7 per cent from its peak on 1 September.
The fall comes after concerns over Yum China’s capacity to increase its market share in China.
It has been a New York-listed company since 2016 and has more than 10,000 restaurants in China.
The underwhelming debut sharply contrasts other trading performances on the Hong Kong market this year.
Netease reported an opening up of eight per cent on its first day while JD.com saw a 5.8 per cent rise.
Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong, said, “Investors who subscribed for the stock are unlikely to hold for long amid the softer tone in the US stock lately.”
Meanwhile, Hong Kong-based Geo Securities’ chief executive Francis Lun said investors seeking to offload their shares contributed towards the opening trading results.
“People who apply for stock in these deals are looking for quick money, they borrow very heavily so if a stock falls they need to get out,” he said.