By ALIFAH ZAINUDDIN
Maybank Investment Bank Bhd (Maybank IB) has acquired an additional 1.3 million shares in Lotte Chemical Titan Holdings Bhd, as part of its continuous effort to stabilise the share price of the petrochemical group.
The recent purchase by Maybank IB at RM6.40 per share brings the number of units bought by the financial institution to 22.12 million shares for RM142.9 million.
Lotte has been rallying support from Maybank IB as the price stabilising manager to boost its shares.
Last Friday, Lotte shares closed relatively unchanged at RM6.41 — nine sen, or 1.4%, below its initial public offering (IPO) of RM6.50. Despite ongoing stabilisation efforts, the counter has yet to end higher than its IPO value since its debut on Bursa Malaysia last Tuesday.
Under the price stabilising mechanism, Maybank IB can buy up to 27.77 million shares, or 4.8%, of the total number of Lotte shares post-listing and may only intervene for a maximum of 30 days.
Lotte is the 10th company to list on the local exchange this year and the largest in five years. The size of the IPO has been a stumbling block in attracting tight-fisted investors.
Analysts previously contacted by The Malaysian Reserve largely anticipated the underperforming stock to trade lower once Maybank IB reaches its buying limit due to poor market conditions.
Retail investors are keener on smaller listings such as Advancecon Holdings Bhd — which has jumped 42.9% in two weeks to 90 sen from its offer price of 63 sen.
Moreover, the downswing of the petrochemical industry will also add to the challenge of retaining the price on the high side, as reflected in Lotte’s revised valuation and funding targets.
The company had to down-size its shares to 580 million shares sold at RM6.50 a piece, from its higher indicative price target of RM8 a share with 684.7 million shares on offer.
The institutional offering was effectively reduced by one-fifth after the price discovery process.