Far East Global Group, a building facade specialist, raised $55 million from its Hong Kong initial public offering (IPO) after fixing the price at the bottom of an indicated range. The price suggests that economic uncertainties and volatile markets have made investors cautious and selective with regard to new issues.
Far East Global sold 361 million shares at HK$1.18 apiece, which translated into a 2010 price-to-earnings ratio of 8.5 times.
Investors were concerned about growing material costs which might affect the company's profit outlook, and about how the company can differentiate itself from its competitors, sources said. But the cornerstone investor, which is an industry heavyweight, helped attract orders.
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