DOHA: Shares in Mesaieed Petrochemical Holding Company (MPHC) or Mesaieed surged by 450 percent on the first day of trading yesterday. The shares opened at QR50, up from their initial public offer price of QR10, then trended in an upward direction to close at QR55, after touching an intra-day high of QR73.90.
HE Dr Mohammed bin Saleh Al Sada, Minister of Energy and Industry and Chairman of the MPHC Board described the listing as a ‘milestone for MPHC’.
The market was surprised to watch Mesaieed soaring at an ‘unimaginable high’ on its debut on Qatar Exchange (QE). “Even big guys were not expecting such a surge. It’s mere speculation that drove the stock high. You need to wait for the next couple of days to know where the stock is really heading”, an analyst at a leading investment bank told
The surge on the opening day was mainly because of price fluctuation being permitted for the first day of listing. The fluctuation in prices will be restricted from either going up by 10 percent or going down from that level from the second day. The stock is expected to cool off in the coming days, another analyst noted. “But today’s excitement was missing in the market during the first day tradings of some companies, listed last time”, he added.
A top executive of MPHC said he is bullish as he expects active participation of institutional investors and foreign retailers, who were denied subscriptions to the offerings, in the coming sessions. “We are expecting huge demand from foreign investors and local companies who were denied opportunities to take part in the IPO, Ahmed Abdul Hakim, Executive Director, MPHC told Al Arabiya.
‘There were lot of expectations. The IPO was coming after a long time and there seems to be a lot of pent up demand. But the market never expected such a huge surge. Even in majlis discussions, the investors were expecting something around 40 percent rise on the opening day”, said another market analyst. Mesaieed’s number of executed transactions amounted to 11,801 yesterday, totalling 11,005,599 traded shares for a total value of over QR674m. However, the buoyancy could not help lift the market yesterday, as Mesaieed trading did not impact the benchmark index.
“As part of the index law, new listed companies will not be included in the index until six months”, Syed Mohsin Mujtaba Rizvi, Director, Product and Market Development, QE said.
“QE’s benchmark index dropped 0.14 percent yesterday. The industrials sector index in which the MPHC was listed fell in negative territory after shedding 0.50 percent.
“Institutional investors were almost missing in the market yesterday.”
Retail investors just want to own the stock- it has overheated though, and risen far above the consensus fair value,” Reuters quoted Ahmed Shehda, head of trading at QNB Financial Services, as saying.
Mesaieed is the first company to be listed on the bourse since the global index compiler MSCI announced to upgrade Qatar to the emerging market status.
With the listing of Mesaieed, the total number of listed companies on the bourse rose to 43.