May 21 The initial public offerings of two
master limited partnership (MLP) companies stood out in a market
where investors are beginning to take a closer look at
Share offerings of PBF Logistics LP and GasLog
Partners LP were priced at or above their expected
range in May, bucking a trend of under-priced IPOs.
PBF Logistics' offering was priced $2 above the range, while
GasLog's was priced at the top end among the 14 IPOs priced so
far this month.
"(Investors) are actually looking at the financials rather
than going for the sexy cloud-based software-as-a-service IPOs,"
said Scott Sweet, senior managing partner at IPO Boutique.
Chinese online cosmetic retailer Jumei International Holding
was the third company whose shares were priced above
the range this month.
Shares of both PBF Logistics, formed by PBF Energy Inc
to operate oil and refined petroleum logistics assets,
and LNG tanker operator GasLog also registered strong gains on
their first outing on the exchange.
GasLog's shares are up more than 27 percent while those of
PBF have gained 18 percent since listing, a sign that investors
are veering towards stocks that offer steady returns.
"Tech stocks are more expensive than MLPs, but MLPs have the
income and stability," said Jack Ablin, chief investment officer
of BMO Private Bank.
"I would call MLPs as no-news-is-good-news asset class
whereas tech stocks need a catalyst to continue to advance," he
The only other company to outperform the MLPs is technology
firm Zendesk Inc, whose shares are up nearly 88 percent
since their listing on May 15.
Nearly half of the 27 companies that went public in April
were priced below their expected range, making it the worst
month for IPO pricing since June 1998, according to Thomson
In contrast, out of the 29 IPOs in March, only two were
priced below their expected range, while five were priced above.
A weak IPO market is likely to cast a shadow on the big
Chinese internet retailers that are looking to go public in the
China's JD.com is expected to price later on
Wednesday, while Alibaba IPO-ALIB.N is getting ready for an
U.S. offering that is being billed as the largest IPO in the
(Editing by Sriraj Kalluvila)