China's Lygend Resources shares climb in Hong Kong debut

Shares of Chinese nickel producer and trader Lygend Resources & Technology Co Ltd 22245 traded as high as HK$16.02 each in their Hong Kong debut on Thursday, up 1.4% from the offering price.

That compares to a 2.3% rise in the benchmark Hang Seng Index HSI.

The company priced its shares at HK$15.80 apiece to raise $470 million in an initial public offering (IPO) that is the fourth-largest in the city so far in 2022.

The Ningbo-based firm sold 232.54 million shares in the IPO and the final price was towards the bottom of a HK$15.60 to HK$19.96 range flagged when the deal was launched last week.

Institutional investors' demand to buy Lygend shares in the IPO was only moderate with those shareholders subscribing for 1.4 times the amount of stock on offer, according to the company's listing documents.

Retail demand was around the same mark as the institutional tranches.

Volatile financial markets due to the Russia-Ukraine war, China's ongoing COVID-19 lockdown, and higher interest rates have dented investor demand to buy new share sales globally.

In Hong Kong, the demand is well down from the peak of the IPO boom of last year when deals were routinely oversubscribed by hundreds or up to thousands of times.

Hong Kong IPOs have been worth nearly $6 billion so far in 2022, the lowest level in a decade, according to Refinitiv data.

Lygend Resources had said in its prospectus the IPO proceeds will be earmarked for development and construction of nickel product production projects on Indonesia's Obi Island and to fund a joint venture it has with Contemporary Amperex Technology Co Ltd 300750 to develop products on electric vehicle battery value chain.

($1 = 7.8012 Hong Kong dollars)