China "bad bank" IPO offers bet on slowdown
HONG KONG (AP) — A Chinese bad-debt management company's shares are soaring in their Hong Kong debut, highlighting strong investor appetite for a business that will flourish if the world's No. 2 economy stumbles.
China Cinda Asset Management Co.'s shares jumped as much as 23 percent after they started trading Thursday.
The company is China's first ever distressed asset management company to go public.
It's a so-called "bad bank," one of four big state-owned entities originally tasked with moving nonperforming loans off the books of China's state-owned banks.
Cinda raised 18.5 billion Hong Kong dollars ($2.4 billion) from its stock offering, making it the biggest IPO in Hong Kong this year.
The company says it makes money by buying up distressed assets at a discount and then selling them later for a profit.