Poor market tone roils Peoples Phone

Heavy corporate backing needed to secure IPO at the bottom end of range.

The HK$1.22 billion $156 million flotation of China Resources Peoples Telephone was finally completed by lead manager UBS on Monday after being almost completely stymied by collapsing sentiment in the Hong Kong IPO market.

On Friday, when the 268.5 million share deal was scheduled to price, it was rumoured to be heavily undersubscribed. In the end, the retail order book amounted to only 5.3% of the total deal 14.33 million shares, compared to an initial 10% threshold.

The institutional order book scraped home, but only after corporates took up 70%, with institutions accounting for just 30%. About 50 corporate and institutional investors participated in total.

UBS itself...

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