(Recasts, adds market comment)
* Firm raised $1.4 bln in HK share offering
* Tough year for mainland brokers as investors shun stock
* China Merchants Sec has market cap of about $15 bln
By Julie Zhu
HONG KONG, Oct 7 China Merchants Securities Co
Ltd, the country's eighth largest brokerage by assets,
made a flat Hong Kong debut on Friday as worries about volatile
mainland stock markets and debt levels at mainland Chinese
financial institutions hang over the sector.
The lacklustre first day of trade comes after its $1.4
billion share offering met with tepid demand, pricing slightly
below the middle of its indicative marketing range.
At its offering and latest trading price of HK$12.00, the
company has a market value of about $15 billion. It plans to use
part of proceeds from the new share issue to expand overseas,
said Gong Shaolin, company chairman, at the listing ceremony.
"Chinese companies going global has become a trend. Our
listing today is an important step for us to expand abroad
further," he said.
Like other mainland rivals, the brokerage controlled by
state-owned conglomerate China Merchants Group, is having a
"Trading volume is down, and there are fewer IPOs. Many
brokers are seeing their earnings falling. The market is trying
to heal from the aftermath of last year's crash," said Hong Hao,
chief strategist at BOCOM International.
China's stock markets have slumped 15 percent so far
this year despite signs that the economy may be slowly
steadying. Many investors have not returned since last year's
crash, opting to put their money into the surging property
The Shenzhen-based firm saw first-half net profit tumble
69.5 percent to 2.24 billion yuan ($330 million), hit by sharp
drops in revenue for its broker, wealth management and
investment businesses, according to its prospectus.
Its Shanghai-listed shares are down about 21
percent for the year to date. The stock has not traded this week
due to China's Golden Week holiday.
Eleven cornerstone investors, including PICC Life, Chow Tai
Fook and Fosun International, took up about 60 percent
of the deal, Thomson Reuters publication IFR reported.
(Reporting by Julie Zhu; Editing by Edwina Gibbs)