August 7, 2015 / 2:52 AM / 4 years ago

UPDATE 1-China Railway Signal & Communication edges up in HK debut

* Shares up as high as HK$6.38 vs HK$6.30 IPO price

* Cornerstone investors buy nearly two-thirds of IPO (Adds investor comments, demand for the IPO, cornerstone investors)

By Elzio Barreto

HONG KONG, Aug 7 (Reuters) - Shares in China Railway Signal & Communication Corp (CRSCC) , edged higher on their trading debut on Friday after the world’s largest builder of rail traffic control systems braved volatile stock markets to raise $1.4 billion for acquisitions, research and expansion of its business.

The stock traded at HK$6.32 in mid-morning and rose as high as HK$6.38, while the benchmark Hang Seng index was up 0.9 percent. CRSCC had marketed the IPO in a range of HK$6.30 to HK$8.00 per share.

The IPO was Hong Kong’s second-largest this year after the $2 billion listing of Lenovo Group’s parent Legend Holdings Corp in June.

Some 16 cornerstone investors had bought nearly two-thirds of the deal, which analysts said helped support the stock in the face of tepid demand from retail investors spooked by the plunge in Chinese stocks since mid-June.

“They already had a schedule previously and unfortunately the market went down so quickly, which they didn’t expect. It’s out of their control,” said Jasper Chan, corporate finance officer at Hong Kong brokerage Phillip Securities.

“They priced at the low end, so that may have supported the debut.”

The institutional investors that bought $971 million worth of shares in the IPO include construction firm China Railway Group Ltd , China Life Insurance Co Ltd and several other state-owned enterprises.

Reporting By Elzio Barreto; Editing by Miral Fahmy

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