by winston » Wed Nov 24, 2010 11:54 am
Not vested
UPDATE 1-S'pore's Mewah shares in weak debut
* Mewah takes a beating on volatile markets
* Company prices IPO below indicative range
* Mewah to be hit by rising input prices - analysts
By Charmian Kok SINGAPORE, Nov 24 (Reuters) - Shares of palm oil refiner Mewah International fell as much as 13 percent on their debut on jittery global markets, marking one of the weakest IPO performances in Singapore in recent months.
Mewah's S$277 million ($213 million) listing comes as an IPO boom sweeps across Asia, with more than two-thirds of the global volume in 2010 raised in the region, powered by strong economic growth.
"Mewah's IPO tanked. I think it's somewhat sentiment-driven and also the fundamentals do play a part in it," Terence Wong, co-head of research at DMG & Partners, said on Wednesday.
Mewah shares traded at S$1.0, 9.0 percent below their initial public offering price of S$1.10 in a market <.FTSTI> up 0.4 percent. More than 33 million shares were traded, making Mewah the fourth-most actively traded stock by volume on the Singapore exchange.
Mewah, which produces vegetable oil products for sale to wholesalers, retailers, and supermarkets such as Carrefour , plans to expand its refining capacities and boost its revenue by tapping fast-growing markets including China, where demand for edible oils and fats products is growing.
With operations in Singapore and Malaysia, Mewa had priced its IPO below its indicative range of S$1.25-S$1.55.
"The subscription for the IPO wasn't really fantastic and it was priced below its indicative range, which could also have acted against the stock too," said Carey Wong, an investment analyst at OCBC Investment Research.
Mewah says it is one of Asia's biggest edible oils processing firms with a total refining capacity of 8,000 tonnes per day. The IPO was 1.9 times subscribed.
The palm oil processor, unlike plantation owners such as Golden Agri, may also see their margins squeezed by rising palm oil and input prices, Wong added. Mewah does not own plantations.
Credit Suisse was the sole global coordinator, bookrunner, underwriter and issue manager for Mewah's IPO.
Source: Reuters
It's all about "how much you made when you were right" & "how little you lost when you were wrong"