Two of Hong Kong's biggest recent initial public offerings slumped in their trading debuts on Thursday, falling victim to weak investor demand that has pressured new listings in the once booming global IPO powerhouse.

Chow Tai Fook Jewelry Group Ltd <1929.HK>, the world's biggest jewelry retailer, and New China Life Insurance <1336.HK> both dropped 8 percent or more after the two companies raised a combined $3.9 billion. New China Life, which listed both in Hong Kong and Shanghai, will debut in mainland China on Friday.

The two companies were among a rash of issuers aiming to get deals done before the end of the year after the European debt crisis virtually closed the Hong Kong IPO market in the second half.

However, both deals were priced at or near the bottom of their indicative ranges, signaling the lack of appetite from retail and institutional investors wary of the outcome from Europe's debt troubles.

Haitong Securities Co Ltd <600837.SS>, China's No.2 brokerage by assets, pulled a planned $1.7 billion Hong Kong stock offering on Monday due to poor market conditions and after receiving insufficient demand from investors, although some smaller IPOs have been more successful in Shanghai.

This is not only about the IPO market, but also the market as a whole, said Alvin Cheung, associate director at Prudential Brokerage in Hong Kong.

The benchmark Hang Seng Index <.HSI> has plunged about 20 percent this year, making company valuations the cheapest in Asia-Pacific. Amid waning investor appetite, IPO issuance in Asia ex-Japan has more than halved this year to $72.4 billion, according to Thomson Reuters data.

The global financial situation did affect buying power in the short term, but I'm confident our company will do quite well in the long run, Chow Tai Fook's Chairman Henry Cheng told a news conference at the Hong Kong stock exchange.

The Hang Seng's tumble has depressed valuations as measured by forward price-to-earnings ratios, and has seen Hong Kong-listed firms slip to the bottom of the region's value rankings, according to a Nomura research report.

Companies on the Hang Seng trade at a 2011 P/E of 9.1 times, compared with 9.9 times for companies on South Korea's Kospi <.KS11> and 15.2 times for those on Malaysia's index<.KLSE>.

The cheap valuations are failing, however, to draw retail investors, who see little room to profit from short-term stock gains, given the ongoing uncertainty in global markets.

I don't think it's a good recommendation to buy any IPOs right now. It's not a good opportunity and not a good time, Prudential's Cheung added.

MODERATELY OVER-SUBSCRIBED

Both Chow Tai Fook and New China Life said in separate securities filings that their international offerings were only moderately over-subscribed.

Demand from Hong Kong retail investors, who focus on the first-day performance of IPOs, was well short of the total offered for New China Life.

Chow Tai Fook, which is a well recognized brand in Greater China, said it received orders worth almost seven times the total offered, compared with more than 2,000 times over subscription for the IPO of handbag retailer Milan Station <1150.HK> in May.

Chow Tai Fook shares closed at HK$13.8 from its IPO price of HK$15 a share.

New China Life, which is 15 percent owned by Swiss insurer Zurich Financial Services AG , dropped to HK$25.7 from the HK$28.5 offering price. The broader market <.HSI> fell for a sixth day running, down 1.8 percent.

Stock performance is not top priority to us, Kang Dian, chairman of New China Life, told a news conference, adding the company would focus on its business strategy and targets. We believe the company is on a healthy and steady path, and we cannot control daily share prices going up or down.

Deutsche Bank , Goldman Sachs , HSBC <0005.HK> and JPMorgan are joint global coordinators of the Chow Tai Fook IPO, with Citigroup , Credit Suisse and UBS acting as joint bookrunners.

China International Capital Corp (CICC) and UBS Securities are lead underwriters of New China Life's Shanghai offering.

CICC, Goldman Sachs and UBS were hired as joint global coordinators of the Hong Kong tranche of the deal, with Bank of America Merrill Lynch, BNP Paribas SA , Deutsche Bank, HSBC and China Merchants Securities also acting as joint bookrunners.

(Additional reporting by Rachel Lee; Editing by Richard Pullin and Muralikumar Anantharaman)

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