HK's Hopewell eyes landmark

HONG KONG has seen some decent offerings this year. Sinotrans, a Chinese freight courier, raised HK$3.4bn (£273m) in February, listed at HK$2.19 and now trades at HK$2.40.

Lianhua, a promising China supermarkets chain, scooped up HK$581m in June and its shares have since risen by about a fifth to HK$4.65.

Today it was the turn of flamboyant Hong Kong tycoon Gordon Wu, who listed Hopewell Highway Infrastructure, a road builder and operator that was spun off from his larger construction-dominated conglomerate Hopewell Holdings. The offer, the second-largest this year, raised HK$3bn for Wu and his lieutenants. But the shares, priced at HK$4.18, dropped to HK$4.10.

Brokers said the pricing may have been a bit rich, coupled with the fact that while both Sinotrans and Lianhua do not have any obvious listed sector rivals, Hopewell Highway does. And while today's offer was priced at about 17 times forward earnings, Wu's competitors such as Jiangsu Expressway command significantly less, around 14 times. Jiangsu fell 7.5 cents, or 2.3%, to HK$3.225.

But Wu will know success is a long-run enterprise. Prospects for Hopewell Highway will turn in part on the fortunes of a gigantic bridge the Hong Kong authorities want to build, linking the territory on one side of the Pearl River Delta with bustling Chinese commercial cities and the gambling mecca of Macau on the other. The 29-kilometre, Y-shaped affair is exactly the kind of mega-project that the post-handover Hong Kong government loves to endorse to try to rescue the territory from its economic slump.

Wu has been an enthusiastic backer of the venture, pledging funds for its construction and suggesting it be called the Handover Bridge. He hopes today's newly-listed unit will win a slice of the action to build and run the project, which will in turn boost usage on its existing roads.

The Hong Kong market sagged, echoing Wall Street's overnight weakness. All 33 members of the Hang Seng index were weaker or static as it fell 189.8 points to 9987.5. HSBC, the global bank and Tuesday's star, dropped HK$1 to HK$95.75.

In Korea, the market likewise reversed course, led by Wall Street, with the Kospi index closing down 13.96 points, or 1.9%, at 707.88. The focus was on carmaker Hyundai, which fell despite settling a dispute with unions that had triggered periodic stoppages. It slid 1250 won, or 3.5%, to 34,250 as brokers said that while the prospect of smooth production was a plus, management had conceded too much ground. Among the terms agreed is the introduction of a five-day week.

Japan's market was a touch softer in keeping with the US lead, led down by most exporters and tech shares. Carmaker Toyota, however, bucked the trend as investors found encouragement in its first-quarter figures. As the Nikkei 225 share average dipped 58.67 points, or 0.6%, to close at 9323.91, Toyota rose 50 yen, or 1.7%, to 3070.

Indonesian shares were resilient after Tuesday's bomb attack on a top hotel in the capital. The Jakarta Composite index gained 5.25 points or 1% to 493.78, paring some of Tuesday's deep loss.