Since their strong market debuts, some 2021 Asia-Pacific IPOs have seen a sharp reversal in fortunes.
Kuaishou, a Chinese short video company and Tiktok competitor is at the top of the list, having more than doubled from its initial public offering price during its February debut.
However, as of Wednesday’s market close in Hong Kong, the stock was 77 percent lower than its first-day gains.
In other news, Indonesian e-commerce firm Bukalapak has plummeted sharply after rising nearly 25% on the first day of trading. As of Wednesday’s close, the stock was 57 percent below those levels. Since their strong market debuts, some 2021 Asia-Pacific IPOs have seen a sharp reversal in fortunes.
Kuaishou, a Tiktok competitor and Chinese short video company, is at the top of the list, having more than doubled from its initial public offering price during its February debut. Morningstar was the only Asian listing among the top five largest global IPOs by deal size.
However, as of Wednesday’s market close in Hong Kong, the stock was down 77% from its opening day gains.
The stock of Indonesian e-commerce firm Bukalapak has dropped precipitously after rising nearly 25% on the first day of trading. As of Wednesday’s close, the store was down 57% from those levels. These losses result from several issues, including Beijing’s ongoing crackdown on China’s tech sector, which has resulted in massive fines for companies like Alibaba and Meituan.
Not Unique to Asia
Treasury Yields in the United States have also risen as the Federal Reserve indicates that it will soon normalize monetary policy. In such circumstances, investors tend to avoid stocks in sectors such as technology. Rising interest rates may harm these stocks by reducing a company’s ability to fund growth and making future cash flows less valuable.
The rapidly spreading omicron COVID variant has also weighed on investor sentiment. Moreover, it dampened risk appetite in recent weeks about the new strain’s potential economic impact remaining.
Pitchbook’s James Thorne and Jordan Rubio highlighted blockbuster 2021 market debuts elsewhere in the world that have also dropped sharply.
Didi, a Chinese ride-hailing company, announced earlier this month that it would delist from the New York Stock Exchange less than six months after going public. It is also planning a Hong Kong debut in the face of political pressure from Beijing.
European Stocks
The pan-European Euro Stoxx 600 index fell 0.1 percent on the day. Following the Christmas holiday, British and Irish markets reopened. The FTSE 100 was up 0.7 percent, catching up with other regional indexes.
Global investors expect a Santa Claus rally to cap off a year in which the S&P 500 has risen by more than 27%. Historically, the benchmark index increased during the Santa Claus rally. It occurred during the final five trading days of the current year and the first two trading days of the new year.
Following a mixed session on Tuesday, U.S. stocks were little changed. Market participants have spent recent weeks juggling concerns about new COVID restrictions and tighter central bank policy, despite preliminary research indicating that the omicron strain of the virus is milder than previous variants such as delta.
Infections in the United Kingdom surpassed 100,000 at the start of this week. At the same time, France reported cases exceeding 100,000 for the first time. On Tuesday, France said a record-breaking 179,807 new coronavirus cases.
The U.K. government’s life sciences advisor, John Bell, said Tuesday that omicron is not the same disease we saw a year ago, which helped ease concerns about the new variant.
Individual stock news showed that the media, mining, and retail sectors were significantly higher. S4 Capital, Glencore, and Howden Joinery were just a few U.K. companies that topped the Euro Stoxx 600.
