British insurance giant Prudential picked a bad day to debut on the Hong Kong Stock Exchange as the Hang Seng Index fell 3.5%, says the South China Morning Post.
According to the Post, Prudential listed in Hong Kong to attract rich Chinese investors to participate in its US$21 billion rights issue. The company needs funding to help finance a US$35.5 billion planned acquisition of American International Assurance, the Asian subsidiary of beleagured U.S. insurer American International Group.
But the company got a cool reception from investors, as it closed at HK$57.20 - 4.2% below its closing price in London on Monday.
"The liquidity is drying up," Francis Lun Sheung-nim, a general manager at Fulbright Securities told the Post. "Prudential will have to work very hard to drum up interest."