OFFICIALS of three newly listed companies took the easy way out to explain why their trading debuts failed last week.
'Bad market sentiment' is a handy explanation these days.
It is unfair to blame the disappointing share performances on the market environment alone, without admitting some faults in the companies' fundamentals and pricing strategy.
While it is investment bankers' responsibility to secure the highest issue price possible for a listing candidate, an overly aggressive pricing strategy can easily damage the subscription rate and secondary trading activities, especially when the market is bearish.
If an initial public offering is below full subscription, it exerts additional pressure on the stock performance.
There is an over-hanging fear that underwriters and investors will offload the redundant shares.
It is undisputable that market sentiment has played a role in influencing the performance of the stocks because the new issues are now more expensive than two weeks ago when the price was fixed.