2021 Asian IPO has declined since its powerful debut day performance

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Thai investors check electronic boards showing stock prices.

Amphol Thongmueangluang | SOPA Images | LightRocket | Getty Images

Some 2021 Asia-Pacific IPOs have seen a sharp turnaround since their strong market debut.

At the top of the list are Chinese short video companies and Tiktok-rivals. Kuaishou, Which More than double the issue price at the time of debut in February.. This was the only Asian list of the world’s top five IPOs of the year in terms of transaction size. According to Morningstar..

However, at the closing market price in Hong Kong on Wednesday, stock prices were 77% below the rise on the first day.

Elsewhere, stocks in Indonesian e-commerce company Bukalapak also fell sharply after rising almost 25% on the first day of trading. As of Wednesday’s closing price, stocks are currently 57% below these levels.

Another Chinese stock that plummeted from its debut gain JD Logistics, Which Raise over $ 3 billion in IPO.. Based on Wednesday’s closing price, the stock was 36% below the closing price on the first day.

Stock Selection and Investment Trends from CNBC Pro:

These losses follow a number of problems, including Beijing’s continued crackdown on China’s technology sector. Alibaba When Meituan slap Huge fine..

Yields on the US Treasury are also rising as the Federal Reserve suggests that monetary policy will soon begin to normalize. Under these circumstances, investors tend to avoid stocks in sectors such as technology. These stocks can affect the ability of companies to fund growth and be hurt by rising interest rates that reduce the value of future cash flows.

The rapidly prevailing variant of Omicroncovid has also put further pressure on investor sentiment in recent weeks, weakening risk cravings and leaving questions about the potential economic impact of new stocks.

Not unique to Asia

To be sure, poor performance after an IPO is not unique to this region.

In the December memo, Pitchbook’s James Thorne and Jordan Rubio emphasized that the blockbuster 2021 market has debuted elsewhere in the world and has fallen sharply since its release.

One of those examples was a Chinese ride-hailing company DidiAnnounced earlier this month Delisted from the New York Stock Exchange within 6 months of listing.. He also plans to make his debut in Hong Kong instead in a report of political pressure from Beijing.

Other US listed companies that saw the following mega IPOs Robin hood And South Korea Coupang, And “lost significant value,” they said.

“This sluggish performance has led to a chill in the IPO market, with some new issuers delaying or shrinking their IPO plans. All in all, 2021 could represent the highest point in the IPO market. Yes, for the next few years. “

Aswath Damodaran of New York University told CNBC earlier this month that the post-IPO slump could be due to some investors’ support for “big market delusions.”

Such investors are “not doing their homework” to consider the business models of these companies. The reality usually begins when the first earnings report is published, explained a professor of finance at NYU Stern School of Business.

“This is a bit of a nasty sign, but by itself … I don’t think it’s a danger signal. It’s like seeing a lot of low-earning, high-loss, high-potential companies going public. I think it’s a sign of a good company, “said Damodaran.

2021 Asian IPO has declined since its powerful debut day performance

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The post 2021 Asian IPO has declined since its powerful debut day performance appeared first on Eminetra.

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