Sinotrans Shipping Ltd. tumbled on its Hong Kong trading debut as a drop in iron ore and coal freight rates caused investors to sell bulk-shipping stocks.
The company slumped 7.7 percent to HK$7.55 at the 12:30 p.m. break from its offer price of HK$8.18. Pacific Basin Shipping Ltd. plunged as much as 11 percent, its biggest fall in three years of trading in the city. STX Pan Ocean Co., South Korea's largest bulk carrier, lost 9.7 percent to S$2.60 in Singapore.
The Baltic Dry Index, an overall measure of the cost of shipping commodities, has fallen for seven days in a row on concern that attempts to slow economic growth in China may stem demand for iron ore, used to make steel. Construction booms in China and India has caused dry-bulk shipping rates to double in the past year.
``The growth of imports of iron ore in China has slowed down a bit over the past few months,'' said Edward Wong, an analyst at Quam Ltd. in Hong Kong. Dry-bulk ``share prices have had a good run this year and investors are taking profits.''
U-Ming Marine Transport Corp., Taiwan's biggest bulk carrier, plunged 6.9 percent to NT$78.2, the lowest in three months, at the 1:30 p.m. close of trading in Taipei. STX Pan Ocean's Seoul-listed shares dropped 4.2 percent to 3,645 won at 2:45 p.m. in the city.
The Baltic Dry Index has lost 4 percent this week. It fell 1.8 percent to 10,328 yesterday.
Largest Shipping IPO
Sinotrans Shipping raised HK$11.45 billion ($1.47 billion) in the largest Chinese shipping initial public offering since at least 1999 to expand its fleet.
``We are very confident about our profitability in 2008 and beyond,'' Zhao Huxiang, president of China National Foreign Trade Transportation (Group) Corp., Sinotrans Shipping's parent, told reporters in Hong Kong today. ``Asia, especially China, has strong demand for dry-bulk shipments.''
Hong Kong individuals ordered 252 times the number of Sinotrans Shipping shares initially set aside for them, said two bankers familiar with the sale on Nov. 19. International institutions sought about 85 times the shares available to them after more stock was allocated to Hong Kong individuals to cover demand, they said.
BOC International Holdings Ltd. and UBS AG arranged the share sale. |
