China Broker Huatai’s Hong Kong Debut Fails to Match Predecessor

Huatai Securities Co.’s shares rose as much as 7.3 percent in their Hong Kong debut, or about a fifth of the first-day gain of the last Chinese brokerage to list in the city.

The stock climbed 5.2 percent at HK$26.10 as of 10:10 a.m. local time on Monday. The benchmark Hang Seng Index rose 0.4 percent. Huatai’s gain compared with a 35 percent increase for GF Securities Co. when it listed in April.

The divergence of the two brokerages’ first-day performances may reflect concern that the Chinese stock-market boom will turn to bust after the Shanghai Composite Index more than doubled in the past year. A 6.5 percent plunge in the Shanghai index on Thursday highlighted the risk of a market correction.

Huatai raised $4.5 billion from its first-time share sale in Hong Kong. The extra cash raised by securities firms has helped to fuel China’s stock rally by filling their coffers for lending to investors.

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