GRAND Twins International shares closed down 4.9 per cent as the garment maker ended its first day of trading on the Cambodia Stock Exchange (CSX).
Opening today’s session at 9,700 riel ($2.41) with a ceremonial bell ringing at the CSX’s head office, GTI stocks had dropped to 9,220 riel ($2.28) by the market’s 1pm close.
Trading volume for the CSX’s newest arrival remained modest, with just over 3,100 shares changing hands on day one.
Stephen Hsu, CEO of Phnom Penh Securities (PPS), the chief underwriting firm, expressed concerns over the first day’s result.
“Investors still have not enough confidence in this market,” he said.
Hsu said PPS would look to set up measures to allow the underwriter to stabilize the newly listed stock.
“For stabilizing the price, I think the regulation for Green Shoe Option should be set up," he said.
Listing number two for CSX
The Green Shoe Option – named after the company who first used the method – allows underwriters to intervene during the first 30 days of a stock’s trading by buying up to 15 per cent more shares at the initial listing price in an effort to stabilize the price.
But sufficient regulation allowing underwriters to intervene has yet to be drafted by the Securities and Exchange Commission of Cambodia, Hsu added.
GTI’s day one decline comes in stark contrast to Phnom Penh Water Supply’s (PPWSA) first day of trading in April, 2012 when the firm’s stock rose 48 per cent from the initial IPO listing price of 6,300 riel ($1.56), closing at 9,300 riel ($2.30).
Officials from the Ministry of Economy and Finance, the CSX and GTI gathered at the local bourse this morning to launch the new listing.
Hean Sahib, chairman of the CSX and secretary of state for the ministry, was hopeful that more privately owned companies would follow GTI’s lead in listing publicly.
"With this new listing of GTI, I hope to see the number of listed companies keep increasing in the near future,” he said.