Yahoo Finance Singapore construction firm’s swings stand out among tiny IPOs
By Bailey Lipschultz and Drew Singer
(Bloomberg) — In a lackluster start to the year for equity capital markets, the initial surge in a small supplier of construction equipment from Singapore is striking.
Multi Ways Holdings Ltd. soared in its first day as a public company on the NYSE American exchange on April 3, making it one of the top performing stocks to debut amid the dearth of deals so far in 2023. The 18 other firms based in the Asia-Pacific region to list in the US this year are on average trading below their offering prices following muted debuts.
The more than 40% drop in Multi Ways over the past two days, after it surged as much as 553% at one point in its debut, is reminiscent of the go-go days when the stock market generated eye-popping rallies that abruptly ended in swift declines. Extreme volatility among tiny, new stocks is nothing new for investors, as IPOs frequently experienced gut-wrenching trading in their opening days and weeks on US exchanges during last year’s market doldrums.
“The company doesn’t comment on specific stock price related matters,” a spokesperson said in an emailed statement, adding that the listing is “indicative of the growing market interest for compelling companies from the ASEAN region.”
Multi Ways raised just $15 million in the $18 million offering, continuing a trend of only very small firms opting for initial public offerings thanks to ongoing market volatility, as bigger companies wait for signs of stability. US IPOs and secondary offerings raised just $23 billion last quarter in the worst start to a year since the wake of the 2008 financial crisis, according to data compiled by Bloomberg.
“Once there is evidence of a more stable market with higher certainty, investor confidence should return, and prominent companies that have postponed IPO plans may restart, albeit at more modest valuations,” said Paul Go, global IPO leader at EY, in a report. “Despite positive economic indicators, sentiment remains cautious, with investors being selective in a buyers’ market, seeking profitable and sustainable business cases.”
Among companies that went public via IPOs this week, Hong Kong-based paper packaging firm Millennium Group International Holdings fell from its $4 pricing. And Ispire Technology Inc., a branded e-cigarettes and cannabis vaping products company with significant operations in Hong Kong, rose 7.9% in its debut before wiping out gains Wednesday.
A China-based company that provides advisory services, Top Kingwin, is slated to be among the next stocks to go public in the US this week. The company’s IPO is expected to price as soon as Wednesday.
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