CapitaMalls Asia ends trading debut at S$2.30, up 8.5% on IPO price
By Ryan Huang, Channel NewsAsia | Posted: 26 November 2009 0012 hrs

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SINGAPORE: Shares of CapitaMalls Asia made their much-anticipated debut on the Singapore Exchange on Wednesday.

The counter closed at S$2.30 - up 8.5 per cent over its IPO price - against expectations for a 10 per cent jump.

The listing was the largest in Singapore in 16 years. The IPO was 1.7 times oversubscribed, with the institutional portion garnering about 2.5 bids for every available share.

Liew Mun Leong, chairman of CapitaMalls Asia, said: "We have received very strong response from the local retail investors and international institutional investors, of which more than 65% are from US and Europe.

"They believe in the future of Asia's growing economies, particularly in the domestic and consumer spending sectors."

CapitaMalls Asia owns or manages 86 shopping malls across five countries in the region.

CapitaMalls Asia shares had begun with what appeared to be a rousing start, rising 8.5 per cent over its IPO price to S$2.30. But the initial excitement fizzled somewhat, as the counter dropped to an intra-day low of S$2.23 at midday.

The bulls then returned after the lunch break, sending the stock to an intra-day high of S$2.31 before settling at its opening price of S$2.30.

The performance fell short of analysts' expectations. Roger Tan, vice-president of SIAS Research, said: "At this point of time, I think investors are a bit cautious because it's the end of the year. And so far volatility in the US markets and in China and in Asia has been pretty high.

"So I guess investors would prefer to keep a little bit of whatever returns that they've made over the year in cash, hoping to see whether... we can come back in January to ride another bull run."

Analysts said CapitaMalls Asia's large issue size could have weighed against the IPO. It had offered 1.16 billion shares in its IPO, while another 175 million shares were issued under an over-allotment option. All in, the IPO raised S$2.8 billion.

There was much anticipation surrounding CapitaMalls Asia, especially after the debut of China-based canned food maker Sino Grandness earlier this week, where the counter shot up 52 per cent on its first trading day.

But some analysts still believe that shares of CapitaMalls Asia could hit S$3.00 in a year.

- CNA/ir