HONG KONG: China Tower Corp Ltd's shares opened virtually flat on their debut in Hong Kong on Wednesday, with escalating Sino-U.S. trade tensions weighing on investor sentiment towards the world's biggest initial public offering (IPO) in two years.
Coming after a string of weak IPO debuts in Hong Kong, China Tower's performance could impact upcoming listings such as Sinochem Energy. It may also weigh on the city's attempts to sustain its record fundraising from stock floats.
Shares of China Tower, the world's largest mobile telecommunications tower operator, were trading at HKUS$1.27 in early trade, compared with the IPO price of HKUS$1.26.
It priced its IPO last week at the bottom of an indicative range, raising US$6.9 billion in the world's biggest listing since Postal Savings Bank of China Co Ltd's US$7.63 billion Hong Kong float in 2016.
Companies have raised US$22.4 billion in Hong Kong through listings this year, the city's best-ever seven-month performance, data from Thomson Reuters showed.
But the benchmark Hang Seng Index has dropped 15.6 percent from its January peak amid Sino-U.S. trade tensions, and several recent listings, such as that of Chinese smartphone maker Xiaomi Corp , have struggled to maintain their IPO prices.
China Tower operates 1.9 million tower sites and had 2.8 million tenants at the end of June, its IPO prospectus showed.
The company was formed in 2014 from the tower operations of China's three state-backed telecoms providers - China Mobile, China Telecom and China Unicom - to reduce duplication.
Its operating revenue in 2017 rose nearly 23 percent to 68.7 billion yuan, while profit rose more than 25 times to 1.9 billion yuan. Its three telecoms shareholders contributed almost all its revenue last year.
China Tower's float is the latest move in a government push to inject new life into bloated state-owned enterprises by encouraging greater private capital investment.
Sinochem Energy, a unit of state-owned Sinochem Group, has filed for a US$2 billion Hong Kong IPO as the group seeks to raise capital for a shift to higher-value businesses.
Also debuting on Wednesday was Nasdaq-listed BeiGene Ltd , the second firm to float under Hong Kong's new rules for biotechs. Shares in the firm, which raised US$903 million after pricing its shares at HKUS$108 each, slipped to HKUS$107 in early trade. Under rules introduced earlier this year, biotech firms without revenue or profit can apply to list. Ascletis Pharma Inc , a maker of anti-viral and cancer drugs, last week became this first to list under the new regime, but has seen its shares fall 16.1 percent below their IPO price since debut day.
(Reporting by Julie Zhu; Editing by Christopher Cushing and Muralikumar Anantharaman)