Investors turned off by tax for Prada IPO

Potential buyers are said to be backing away thanks to the 12.5 percent tax.

A Reuters report said retail investors would have to pay Italian capital gains tax for Prada’s up to $2.6 billion Hong Kong IPO.

Alfred Chan, chief dealer at Cheer Pearl Investment, was quoted as saying, "We received little demand from our (retail) clients for the (Prada) shares. It might be the 12.5 percent tax that scared them away and the pricing itself was expensive when it compared with its peers. Unlike institutions, our retail clients hold the shares for a much shorter term."

The report added that the institutional portion of the offer had been five times subscribed, despite some criticisms over its rich pricing.

View the full report here.