Australian chemical distributor Redox's shares opened slightly below their issue price as the country's largest initial public offering (IPO) this year debuted on the Australian Securities Exchange on Monday.
shares opened slightly below their issue price as the country's largest initial public offering this year debuted on the Australian Securities Exchange on Monday.
The firm raised A$402 million by selling its shares at A$2.55. The shares slid 2.2% in the first hour of trading to A$2.50, underperforming the benchmark S&P/ASX200The tepid performance will temper hopes that a strong performance by Redox could help revive Australia's flatlining equity capital markets.
"It doesn't bode well," said Jun Bei Liu, who manages the A$1.2 billion Tribeca Alpha Plus Fund. "We all thought it would be a pretty good IPO. Ultimately it shows lack of confidence among investors."There have been $26.4 million worth of IPOs in Australia so far this year, not including Redox, down from $493.1 million at the same time last year, the data showed.
The 94% decline in Australian IPOs outpaced the 28.5% fall in issuance valuation that occurred across the Asia-Pacific region, including Japan, in the first half of the year. The IPO gave Redox a A$1.3 billion market capitalisation and its shares were priced at the low end of the range flagged to investors when the bookbuild launched in early June.later this year, most likely in November, which would be the largest IPO in Australia in nearly three years.Our Standards:Reports on breaking news in Australia and New Zealand covering the biggest stories across politics, companies and commodities. Previously wrote about equities at Morningstar.
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