Logo of Phnom Penh Post newspaper Phnom Penh Post - GTI price drops on day one

GTI price drops on day one

Hean Sahib
Hean Sahib speaks at the CSX office in Phnom Penh yesterday during the launch of Cambodia’s second IPO. Hong Menea

GTI price drops on day one

After a five-month IPO process steeped in anticipation, Grand Twins International ended its first day on the Cambodia Securities Exchange (CSX) with results many observers found disappointing.

GTI shares opened yesterday’s session at 9,700 riel ($2.41), with a ceremonial bell ringing at the CSX’s head office. The stock had fallen 4.9 per cent to 9,220 riel ($2.28) when trading ended four hours later at 1pm.

Trading volume for the CSX’s newest arrival remained modest, with just over 3,100 shares changing hands.

GTI’s day one decline comes in stark contrast to the Phnom Penh Water Supply Authority’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), to close at 9,300 riel ($2.30).

Stephen Hsu, CEO of Phnom Penh Securities (PPS), the chief underwriting firm, expressed concerns over the first day’s result.

“Investors still do not have enough confidence in this market,” he said.

Hsu said PPS would look to set up measures to allow the underwriter to stabilise the newly listed stock.

“For stabilising the price, I think the regulation for a greenshoe option should be set up,” he said.

The greenshoe option – named after the company that first used the method – allows underwriters to intervene during the first 30 days of a stock’s trading by selling up to 15 per cent more shares at the initial listing price in an effort to stabilise the price.

But regulations allowing underwriters to intervene in that fashion have yet to be drafted by the Securities and Exchange Commission of Cambodia, Hsu added.

Soleil Lamun, deputy director of market operations at the CSX, said the stock’s downturn was unexpected.

“It is more surprising to us. Personally, I expected the price to stay around the IPO listing,“ he said. “I didn’t expect people would sell at a loss the shares they bought during the IPO.”

Svay Hay, CEO of Acleda Securities, was more circumspect, saying GTI’s day-one decline was marginal and did not justify the rapid employment of stabilisation measures.

“It is a very small decline. Investors in GTI are looking at the stock long term, while newcomers will likely wait for a few days to see where the price stabilises naturally before buying in,” he said.

The CSX, like most exchanges, has price stabilisation measures in place limiting fluctuations on the first day of trading to as low as 90 per cent of the initial listing price, and as high as 150 per cent. Fluctuations are limited to a mere 5 per cent up and down every day after the first session.

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 example and consider listing publicly.

“With this new listing of GTI, I hope to see the number of listed companies to keep increasing in the near future,” he said.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Banteay Meanchey gunfight sees 15 Thais arrested, three officers injured

    The Banteay Meanchey Military Police have arrested 15 Thai suspects and their accomplices after a gun battle between two Thai groups caused injuries to three police officers in the early hours of November 21, local authorities said. National Military Police spokesman Eng Hy said that according to

  • PM: Do not defile Tonle Sap swamp forest or else

    Prime Minister Hun Sen ordered police to arrest anyone – including government officials – involved with the deforestation of the flooded forests surrounding the Tonle Sap Lake because it is an area important to the spawning of many species of fish, among other reasons. Speaking in a