The eight new listings so far this year have turned in a somewhat mixed performance vis-a-vis their initial public offering (IPO) prices, with most of those on the Mesdaq market in positive territory.
Based on yesterday's closing prices, three of the four counters which made their debut on the Mesdaq board in the past two months were traded at a premium over their IPO prices.
Leading the gainers in percentage terms were Symphony House Bhd with a 64% premium over its IPO price, followed by AKN Messaging Technologies Bhd with a 22% premium, and Karensoft Technology Bhd with 2%. The fourth new listing, Portrade Dotcom Bhd, ended the day at 30 sen, the same as its IPO price.
Dealers attributed the trend to the profile of investors in Mesdaq companies who they said generally took a long-term view and understood the businesses involved.
Under Mesdaq guidelines, subscribers to shares in Mesdaq companies at the pre-prospectus stage could be individuals with a net worth of at least RM3mil, companies with a net asset value of more than RM10mil, or simply a person who subscribes to a minimum RM250,000 worth of shares, said a merchant banker who declined to be named.
For a Mesdaq company, up to 80% of the shares allotted to the public might have already been taken up by investors in the private placement exercise, the banker added.
The result is that subscribers in Mesdaq companies are usually institutional investors with better holding power and a longer horizon, hence they would be unlikely to unload their holdings in the market during minor fluctuations in prices, said a dealer who has helped in the private placement of these shares.
Another positive factor is that the shares are also placed with the business associates of the Mesdaq companies occasionally.
As these associates have better understanding of the businesses, they are inclined to hold on to the shares even during periods of volatility in price, the banker said.
Symphony House, the latest addition to the Mesdaq board, is an investment holding company with two main business activities provision of information technology (IT) and corporate services.
Listed on Feb 14, the counter has been on the list of actively traded counters since its debut on talk that the group would be a strong candidate for some major contracts from both the public and private sectors based on the group's strong management team and its niche as a one-stop shop for computer solutions and corporate services.
If Symphony House scores a hit with the new RM2mil project to build and supply a call centre in Bangi for the Employees Provident Fund, analysts say, that success would pave the way for the company to secure projects from other government bodies.
Analysts' fair valuations also differ. OSK Investment Research gave Symphony House, which closed at 82 sen yesterday, a fair valuation of 83 sen per share and BBMB Securities Sdn Bhd 58 sen.
Among the other IPOs this year, CIMB's share price notched 4% to close at RM1.82 while Ornapaper gained 73% to close at RM2.76 yesterday.
CIMB recently announced a pro forma after-tax profit of RM130.4mil for year ended Dec 31, 2002, beating the profit forecast it made in its prospectus by 16%.