Broker Sun Hung Kai Drops Most in Six Months on Share SaleAlfred Liu
Sun Hung Kai & Co., a Hong Kong-based brokerage, fell the most in six months after selling HK$1 billion ($129 million) of new stock at a discount.
Shares of Sun Hung Kai plunged 11 percent, the biggest decline since March, to HK$6.15 as of the noon local time trading break. That compared with the 0.8 percent decline in the benchmark Hang Seng Index.
The brokerage, which is backed by private equity firm CVC Capital Partners Ltd., sold 160 million new shares to institutional investors at HK$6.30 per share, it said in a press release yesterday. The sale came after the stock rose last week to close at an almost seven-year high.
“Investors were not prepared for the share sale,” Francis Lun, the Hong Kong-based chief executive officer of Geo Securities Ltd., said by phone today.
The proceeds will be used to expand the company’s loan books and a consumer-finance unit, Sun Hung Kai said. Demand for the share sale was larger than the offer size, the company said. The stock closed at HK$6.89 on Sept. 11 before being suspended from trading until today.