Country Garden soars 37% in Hong Kong debut

Country Garden soars 37% in Hong Kong debut

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Last Update: 12:59 AM ET Apr 20, 2007


HONG KONG (MarketWatch) -- Shares of Country Garden Holdings soared as much as 37% in debut trading Friday, as investors sought out stakes in the real- estate group in spite of efforts by state authorities to cool booming housing prices.
Shares of Country Garden (HK:2007: news, chart, profile) were quoted at HK$7.25 (93 cents) in late-morning trading, after touching an intraday high of HK$7.35, or about 37% above its offer price of HK$5.38.
The developer, which is based in Guangdong province, raised $1.66 billion through the listing of 2.4 billion shares, marking the largest-ever offering by a Chinese developer on the Hong Kong Stock Exchange.
Country Garden focuses on building villas, townhouses and apartments in large-scale projects surrounding the southern Chinese city of Guangzhou. The developer had a land reserve of million square meters of developable area at the end of January.
"As a (real estate) business model, if you have a land bank, it acts like a hedge on rising prices in the future," said Nicholas Yeo, investment manager with Aberdeen Asset Management. "Investors are willing to pay up for a property play in China."
As a sector, Chinese property stocks have been relatively weak so far this year, but sentiment has improved in the run-up to Country Garden's debut as investors warm to the idea of property as a leveraged play on the mainland growth story.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.