SMN Power Holding Company closed up 3.13 per cent on its stock market debut on Sunday. However, the listing failed to boost activity on Muscat Securities Market (MSM) and market volumes remained low as investors remained cautious amid European crisis uncertainties.
After opening at RO3.62, the stock peaked at RO3.65 and touched a low of RO3.60 before closing at RO3.63, up by 110bz. Analysts and brokers expect the stock to range close to its issue price in the near term as there is not much buying interest in the market.
Hamad al Hatmi, brokerage manager, Al Madina Financial and Investment Services, said that the listing of SMN Power has been disappointing and there is not much buying support seen. "We were expecting the scrip to peak around RO3.8 on the first day. However, trading volumes on the SMN Power counter were fine, but issue price remains a concern for investors. Most of the institutions who subscribed to the SMN shares will hold on for long term and we do not expect much fluctuations in the near term. It will trade close to its issue price. Current market conditions are not likely to help new listings."
SMN Power accounted for 52 per cent of the total market turnover. The issue price for SMN Power's initial public offering (IPO) was RO3.52, the IPO was subscribed 1.7 times, largely by institutional investors.
Anil Kumar, senior vice president of Fincorp, said the debut was not strong and the scrip could slip below the issue price in the near term. "We believe that the issue was expensive and do not expect much buying support at this level. The scrip closed lower from its peak and the price movement was not very impressive. There was selling pressure as well. Overall market turnover is low as investors await a solution to the European debt crisis."
Kanaga Sundar, senior analyst at Gulf Baader Capital Markets (GBCM), said the listing was in line with expectations. "We expected only a limited upside due to unfavourable market conditions. The issue was meant for low risk-profile investors. The stock might find support at current levels. The proposed dividend yield would protect the scrip from downside risks."
© Muscat Daily 2011
