(MENAFN) Tecom Group plummeted as much as 17% in its first day of trading in Dubai on Tuesday.
Shares of the real estate firm, whose tenants include Facebook and Google, recovered some of their losses to close the day at 2.44 dirhams, valuing the company at $3.3 billion. The offer was priced at 2.67 dirhams per share, at the high end of the range, and raised $454 million.
For Middle Eastern IPOs, a first-day loss is unusual. Emaar Development PJSC was the most recent stock to lose on its Dubai market debut, falling 4.3 percent in November 2017.
The city's most recent listing, Dubai Electricity & Water Authority, rose 20% on its opening day but has since given up part of its gains.
The Middle East had previously been a bright light in an otherwise bleak market for new share sales, but Tecom's tepid start adds to indications that appetite for riskier assets has dwindled.
Saudi Arabia's al-Othaim family abandoned plans to sell shares in its malls company on Sunday, and developer Retal Urban Development Co. made a shaky debut last week.
Tecom's IPO pricing projected a dividend yield of around 6 percent. According to Faisal Hasan, chief investment officer at Al Mal Capital, this was lower than expected for a company that was primarily considered as a possible dividend play.
“There was not much left in the pricing side,” Hasan stated. “With the decline in secondary markets, there might be some rethinking done by the issuers regarding the timing and pricing of the IPOs.”
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