VILNIUS (Reuters) - Shares in Lithuania's state-owned energy company Ignitis Group IGN1L.VL fell below their initial public offering (IPO) price on their first day of trading in Vilnius and London on Wednesday.
The markets have not been kind to new entrants as high levels of volatility encourage investors to focus on existing holdings or established companies.
Shares dropped to as low as 21.65 euros (19.75 pounds) by 0854 GMT, after opening at 22.70 euros per share at 0700 GMT.
Ignitis Group, which owns Lithuania’s distribution network, power plants and a power and gas trader, was priced at lower end of its IPO range of 22.50 euros.
Energy-related stocks are viewed as particularly uncertain as measures to contain the COVID-19 pandemic have cut into demand and eroded fuel prices.
Viewed as a gauge of uncertainty, the volatility index .VIX stands at 29.5.
"By a rule of thumb, IPOs are easy with volatility in the teens, difficult in the twenties and markets are all but shut in the thirties", an equity capital markets banker said on condition of anonymity. In another long-awaited debut on Wednesday, shares in Russian shipping company Sovcomflot FLOT.MM lost 11% by 0739 GMT on its first day of trading, after being priced at the low end of their IPO range.
Some companies, including Germany’s Springer Nature and Switzerland’s Epic Suisse, have decided to postpone planned stock market listings.
An exception to the trend, as people focus on the safest ways to travel given the pandemic, is German caravan maker Knaus Tabbert KTAG.DE, which opened on Sept. 23 at the low end of its IPO range of 58 euros. It was trading above 62 euros per share on Wednesday.
Reporting By Andrius Sytas; additional reporting by Arno Schuetze in Frankfurt; editing by Barbara Lewis
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