Sinotrans Shipping HK institutional tranche 14 times oversubscribed

SINOTRANS Shipping Ltd's institutional investor tranche for an HK$11.5 billion (US$1.4 billion) Hong Kong stock exchange listing was 14 times oversubscribed.

The bulk shipping unit of Sinotrans Corp plans to issue 1.4 billion shares at a price of HK$7.18 to HK$8.18 per share, with trading to start on November 23.

The offering's institutional orders exclude the US$175 million in shares set aside for cornerstone investors including Hong Kong businessmen Li Ka-shing and Lee Shau-kee.

"I expect rather heated demand because the Baltic Dry Bulk Index remains high," Kenny Tang, associate director at Tung Tai Securities told The South China Morning Post.

The average Baltic Dry Bulk Index, which tracks movement of dry-bulk shipping rates, more than doubled to 7,000 points this year from 3,000 points last year, chairman Zhao Huxiang said.

Chief financial controller Xie Shaohua said the company expected a "substantial growth in earnings for the second half" owing to the surge in dry-bulk shipping rates.

According to its listing prospectus, the company forecast earnings for this year at more than US$126 million, reporting a first-half profit of US$57.59 million.