CHINA Merchants Securities Co., the country’s eighth-largest brokerage by assets, made a flat Hong Kong trading debut Friday as worries about volatile mainland stock markets and debt levels at mainland financial institutions hang over the sector.

    The lackluster first day of trade comes after its US$1.4 billion share offering met with tepid demand, pricing slightly below the middle of its indicative marketing range.

    At its offering and latest trading price of HK$12 (US$1.55), the company has a market value of about US$15 billion. It plans to use part of proceeds from the new share issue to expand overseas, said Gong Shaolin, company chairman, at the listing ceremony.

    “Chinese companies going global has become a trend. Our listing today is an important step for us to expand abroad further,” he said.

    Like other mainland rivals, the Shenzhen-based brokerage, controlled by State-owned conglomerate China Merchants Group, is having a tough year.

    “Trading volume is down, and there are fewer IPOs. Many brokers are seeing their earnings falling. The market is trying to heal from the aftermath of last year’s crash,” said Hong Hao, chief strategist at BOCOM International.

    China’s stock markets have slumped 15 percent so far this year despite signs that the economy may be slowly steadying. Many investors have not returned since last year’s crash, opting to put their money into the surging property market instead.

    Merchants Securities saw first-half net profit tumble 69.5 percent to 2.24 billion yuan (US$330 million), hit by sharp drops in revenue for its broker, wealth management and investment businesses, according to its prospectus.

    Its Shanghai-listed shares are down about 21 percent for the year to date. The stock has not traded last week due to the National Day holiday.

    (SD-Agencies)