Chinese steelmaker Xiwang Special Steel has raised HK$1.33 billion $171 million from the first initial public offering of size in Hong Kong this year. Investors weren’t exactly rushing into the deal, though, and according to sources the stock was mainly bought by a few hedge funds and global funds with a specific view on steel and who thought the valuation was cheap.
However, with analysts divided about the near-term outlook for the Chinese economy, cyclical stocks like steelmakers aren’t an obvious buy and some investors argued that the stock was cheap for a good reason and could stay at these levels for a while.
Indeed, according...
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