Shun Tak opts for rights issue to raise $212 million

Shun Tak Holdings’ share price jumped 9.2% yesterday, recovering all the losses it made last Friday after announcing a fully-underwritten rights issue of at least HK$1.65 billion $212 million. The recovery was partly due to a continued gain in the Hong Kong stock market after the three-day lunar new year holiday, but also suggests that investors may have come around to the idea of doing a rights issue.

The company, which is controlled by the family of Macau casino tycoon Stanley Ho, said in an announcement that it has chosen to do a rights issue to enlarge its capital base without causing a dilution to existing shareholders assuming...