STK Emergent, a closed-end investment fund listed on the Bucharest Stock Exchange (BSE) lost 63.7% in its first trading session, thus marking the one of the steepest plunges in the entire history of debuts on the Stock Exchange.
STK Emergent (STK) started trading for the first time on the stock market yesterday, ending the session with a 63.7% decline compared with the IPO price. The closing price of a STK fund unit stood at 102 RON. The value of the transactions conducted with STK shares stood at some 1.7 million RON (470,000 euros), with the fund reporting a market capitalisation of 6.2 million RON (1.7 million euros). STK had 609,753 units listed on the Bucharest Stock Exchange at a par value of 200 RON.
STK Emergent conducted an initial public offering worth approximately 50 million RON (13.8 million euros) this spring, when 177,877 units were offered for sale at 281 RON.
"The closed-end fund STK is a new instrument on the Stock Exchange, which some investors may be cautious about. I, however, believe that investment funds traded on the stock exchange have a real development potential on the local market and that the floatation of STK Emergent will encourage other mangers to have their investment funds listed," said Stere Farmache, chairman and chief executive officer of the Bucharest Stock Exchange.
Both the running of the IPO and the floatation of the STK Emergent were affected by stock market corrections, which led to an approximately 40% subscription of the IPO and to a steep decline of its unit in the first day of trading.
"It was predictable that the fund would trade below the value in the IPO. On the one hand there's a lack of interest in the financial sector on the part of investors, as a result of the financial crisis, and, on the other, the 281 RON/unit price at which the offering was conducted in the spring was overvalued," said Razvan Pasol, chairman of Intercapital Invest brokerage firm.
"The fund stayed away from the capital market for six months, the time between the IPO and the start of trading, and is now "reaping the benefits" of six months of decline. It is hard to see rises after the market has constantly gone down over the past year," says Lucian Isaac, general manager of Estinvest brokerage firm.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
