Luggage maker Samsonite got off to a poor start on its Hong Kong trading debut Thursday with its shares slumping on opening amid uncertainty in global markets.
The stock opened 10.3 percent lower at HK$13 ($1.67) after an initial public offering, priced at HK$14.50 per share, raised a lower-than-expected $1.25 billion as Samsonite looks to boost its presence in fast-growing Asian markets.
The firm's shares clawed back some ground to HK$13.64 by the break as the broader Hang Seng index ended the morning session 1.45 percent lower.
At a time of unease in markets around the world some firms have decided to delay or cancel their listings in the Asian financial hub, which has become the number-one IPO market.
Earlier this month, Australian miner Resourcehouse shelved an IPO originally slated to raise as much as $3.6 billion, citing weak market conditions.
Samsonite, which makes suitcases, casual bags and travel products, sold 671 million shares 48 percent of the company in the share sale. It had earlier estimated an IPO price range of HK$13.50-HK$17.50 per share, with the top-end price translating into a $1.5 billion initial public offering.
Despite the weak start Samsonite chief executive Tim Parker told reporters in Hong Kong: "I'm very optimistic about Samsonite's prospects in Hong Kong.
"We're extremely pleased to be listing (our) shares here... People in China are travelling more and more and when they travel they need more suitcases."
Before the shares began trading, Parker said "we expect over the next few years to be developing our company extensively in Asia and particularly our biggest markets in China and India."
China and India are the firm's second and third biggest markets respectively, after the United States, he said, adding that the firm also has "a major foothold" in South Korea and Japan.
"Even though Samsonite priced the IPO at a reasonable valuation, the weak market sentiment negatively affected investors who buy in IPOs looking for a short-term gain," Ben Kwong, chief operating officer at KGI Asia, told Dow Jones Newswires.
A restructuring has boosted Samsonite's profit margins while it hikes spending on advertising, especially in Asia, where business grew 45 percent last year, Parker said earlier this month.
European private equity firm CVC bought Samsonite in 2007 in a $2 billion deal, following several earlier restructurings by the company, which almost went bankrupt in 2003.
Samsonite's sales in 2010 recovered to $1.21 billion from $1.03 billion in 2009, when the global financial meltdown pounded the travel market.
Thursday's listing comes as several luxury goods makers prepare to list in Hong Kong in a bid to tap the region's growing wealth.
Prada will make its trading debut later this month with its IPO expected to raise as much as $3 billion, while US handbag maker Coach, already listed in New York, announced in May that its shares may start trading by the end of the year.
Britain's Burberry is also reportedly eyeing a listing in the city.
Firms raised more than $50 billion in Hong Kong IPOs last year, including two monster sales by Asian insurer AIA and Agricultural Bank of China, making it the world's biggest market for new listings.