Three small enterprises, launching their initial public offerings (IPOs) in Hong Kong on Thursday, have raised a total of about HK$426 million ($54.9 million), and have all been oversubscribed by hundreds of times.

"The small amount of funds involved is key to the huge oversubscriptions," explained Alvin Wong, a funds manager at Prudential Brokerage. "Investors may feel lost in the face of Hong Kong's current investment environment, complicated by the city's political uncertainties. Thus, taking the plunge in the IPO market seems a good choice for them," he said.

Among the three companies, milk supplement producer Hin Sang Group was oversubscribed by 859 times, ranking it fifth in the over-subscribers list so far this year. With an offering price of HK$1.18 per share, the firm raised HK$217 million. Local building services provider Nga Chun Holdings, which had been split from Vantage International, raised HK$93.4 million and was oversubscribed 261 times, while Sam Woo Construction Group was oversubscribed 661 times, raising up to HK$116 million.

Francis Gwok Sze-chi, executive director of Bright Smart Securities, said small IPOs tend to draw much interest among investors at the moment as the future of Hong Kong's stock market is unclear with a smaller chance of making profits.

"I expect the share prices of companies with small IPOs to go up in the short term. But, their core businesses will dictate the future trend of their share prices," said Gwok.

"Investors are looking forward to the launch of the Shanghai-Hong Kong Stock Connect scheme but, at the same time, they're worried about a possible delay," he said.

Hua Hong Semiconductors - a mainland first custom chipmaker which was listed on the Hong Kong bourse on Wednesday - was oversubscribed by only about 12 times as the company aims to raise HK$2.43 billion from the flotation. It has offered 228.7 million new shares at HK$11.25 per share.

celia@chinadailyhk.com

(HK Edition 10/16/2014 page8)