* Bank of Chongqing also had lacklustre debut
* Soft tone for bank IPOs comes as other lenders eyelistings
* But online game firm Boyaa surges in first day of trade
By Denny Thomas and Elzio Barreto
HONG KONG, Nov 12 (Reuters) - Shares in Huishang Bank CorpLtd became the second China bank in just over a weekto make a lacklustre Hong Kong debut, underscoring lukewarminvestor appetite for the Chinese banking sector despite alikely raft of listings on their way.
The flat start for Huishang, which raised $1.2 billion inthe island city's biggest bank IPO in three years, follows weakpricing for the offer, near the bottom of its marketing range.
The soft tone for bank listings comes as China Cinda AssetManagement Co Ltd, the nation's biggest bad loan manager, begangauging investor interest for its up to $2 billion IPO thisweek. The offer is expected to be priced in the first week ofDecember..
Also monitoring the debut are other Chinese lenders,including China Everbright Bank, Bank of Beijing and ChinaGuangfa Bank, which are among companies seeking to raise about$11 billion through Hong Kong offerings over the next 8 to 10months.
In morning trade, Huishang Bank shares were changing handsat HK$3.53, the same level at which the IPO was priced, afterhitting a high of HK$3.58. That compares with a marketing rangeof HK$3.47 to HK$3.88.
Bank of Chongqing, the fellow Chinese provinciallender which listed last week, was also trading below its IPOprice on Tuesday.
Some market participants said that of the two, Huishang,which is based in the booming industrial heartland of Anhuiprovince, looks to be the better bet.
"It's fairly valued and is a better buy compared to recentlylisted Bank of Chongqing, which counts local governments as itskey clients, said Jackson Wong, Tanrich Securitiesvice-president for equity sales.
"Huishang is less risky because its business is moreretail-driven and it's one of the more recognizable banks in thecentral parts of China," he added.
With the mainland IPO markets shut down by regulators formore than a year, Chinese lenders are turning to Hong Kong tobolster their balance sheets as bad debts show signs of picking up in the world's second-biggest economy.
But the new offers have met with weak demand as investorstend to prefer listed peers with a known track record ofperformance.
At the IPO price, Huishang was valued at a forwardprice-to-book ratio of 0.95, compared with the average P/B of1.18 for Hong Kong-listed banks, according to Thomson Reutersdata.
To overcome the weak demand, underwriters have been sellingmore shares to cornerstone investors, who get guaranteedallocations in return for agreeing to lock up shares for acertain time. In Huishang's case, China Vanke Co Ltd committed to buy about $400 million in shares, to become itslargest shareholder.
Huishang's debut contrasts with a flying start for BoyaaInteractive International Ltd, China's largestdeveloper of online card and board games.
Boyaa, which raised about $127 million, shot up 30.3percent, underscoring investor optimism over booming growth inthe sector..
The company's offer was swamped by orders from smallinvestors, with the retail portion generating more than 832times demand than the shares on offer, a company filing said onMonday. The institutional tranche of the IPO was "verysignificantly over-subscribed."
Huishang hired BOC International, Citic SecuritiesInternational , JPMorgan, MorganStanley and UBS AG as sponsors for the IPO.
It also tapped another 14 banks, including ChinaInternational Capital Corp (CICC), Citigroup, Guotai JunanSecurities and Nomura, to help manage the offering asjoint bookrunners.
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