Trading begins on PAS shares
Royal Securities, the stock’s underwriter, said the difference between the offering price and opening price was the result of supply and demand.
“The price of 5360 riel [was the result of ] the demand from investors,” he said.
According to CSX officials, the offering price was determined by a bookbuilding exercise in late April that gauged investor interest in the initial public offering (IPO). Local and Asian institutional investors snapped up shares during the bookbuild, which was 2.4 times oversubscribed, while the Japan International Cooperation Agency separately purchased 11.57 million shares, or 54 percent, of the total offered shares.
Investors unable to acquire PAS shares during the bookbuild or the fully subscribed retail subscription last month were able to place orders to purchase shares on its opening day of trading. This excess demand, CSX officials said, helped push up the stock’s opening price.
A higher opening price is often a good sign that demand for a stock is strong and the stock will continue to rise. Most local stocks, however, have dipped below the issue price within days of listing on the CSX.
Yet investors that The Post spoke to yesterday said they were not necessarily seeking a growth stock, but rather investing to realise dividend gains.
PAS has offered investors a guaranteed 5 percent dividend yield on the initial share price for the next three years.
“The 5 percent [guaranteed] dividend will let me hold the stock for the long term,” said a retail investor who declined to be named. “I think the performance [of the IPO] is good because the [current] price is still higher than the IPO price, and there are some investors who are still [making] orders.”
Soleil said SBI Royal has not confirmed whether it will act a liquidity provider for PAS stock, a role that can provide price stability and improve liquidity by making it easier for traders to buy and sell shares.
“We tried talking to SBI Royal before the listing, but it is not [finalised] yet,” he said. “I think that SBI Royal believes that the stock price will not decrease, so they do not want to be a liquidity provider. If the price tends to decrease, they may decide differently.”
Eiichiro So, chairman of SBI Royal, said the firm’s decision to become a liquidity provider would depend on the stock’s performance.
“I think it depends on the market,” he said. “We cannot say a target date on when we will become a liquidity provider.”
PAS Chairman and CEO Lou Kim Chhun said that the company will use the proceeds of the $27 million IPO to purchase new land and equipment to expand its port activities in Sihanoukville.