Langham Hospitality Investments Ltd., a trust backed by Great Eagle Holdings Ltd. hotels, fell 9.2 percent in Hong Kong in the worst debut for an initial public offering of least $500 million in Asia this year.
The shares closed at HK$4.54. The benchmark Hang Seng Index slid 0.3 percent. Langham Hospitality, based in Hong Kong, raised HK$4.26 billion ($549 million) last week selling units at HK$5.00 each, near the midpoint of its price range, according to data compiled by Bloomberg. Asian Pay Television Trust sank 5.2 percent in Singapore yesterday on the second-worst debut after a $1.1 billion IPO, Bloomberg data show.
High-yielding securities across Asia declined today as bond yields jump on concerns that the U.S. Federal Reserve will start slowing debt purchases aimed at igniting economic growth. In Singapore, Keppel REIT and Parkway Life Real Estate Investment led property trusts lower.
“There could be some knee-jerk reaction to rising U.S. bond yields, which is not good for yield stocks such as REITs,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Asia Ltd., whose Japan-based parent oversees about $165 billion.
The trust is backed by hotels including The Langham, Langham Place Hotel and Eaton, all located in Hong Kong’s Kowloon district, according to a filing to the Hong Kong stock exchange. The hotels have a combined 1,629 guest rooms, the document showed.
Citigroup Inc., Deutsche Bank AG and HSBC Holdings Plc managed the offering for Langham Hospitality, according to a prospectus. Langham Hospitality boosted operating profit by 14.5 percent to HK$504.8 million last year, while revenue increased 8.9 percent to HK$1.6 billion as occupancy rates improved, the prospectus shows.