Medibank Private rises as high as $2.23 on ASX trading debut
Medibank Private shares opened at $2.22 and traded as high as $2.23 as they debuted on the share market.
The high marked an 11.5 per cent profit for retail investors who had bought their shares at $2 a piece, while any institutional investors selling would have booked a 3.7 per cent gain if they sold at $2.23.
But the shares could not sustain those gains, closing at $2.14, seven per cent above its launch price but a cent less than the premium paid by institutional investors.
Institutions were expected to be more on the buy side than the sell side on the first day of trade, having generally had their requested allocations drastically scaled back.
Most analysts expected a strong bounce in the price as institutional investors only received 40 per cent of the company's shares and look to boost their stakes; retail investors had received 60 per cent of the company.
Indeed, just ahead of the listing, the Finance Minister Mathias Cormann highlighted how much unmet investor demand there was for the shares.
"We had nearly $12 billion worth of binding bids from broker firms in Australia and New Zealand, more than $5 billion in interest in bids from applications from other retail applicants," he told gathered media at the ASX.
"We had very strong overseas and domestic institutional interest and the results are all here for you to see today."
IG Markets analyst Evan Lucas said there has been huge market interest in the stock with more than half a billion dollars shares traded in the first few hours.
However, he also said the initial enthusiasm generally wanes.
"Most of these IPOs get a really good trade in the first 45 minutes to an hour and then they tend to sidetrack," he said.
"I don't believe it will fall to $2.15 and fall below that, there is a lot of bidding around that sort of level so I think it will hold at its IPO price, I just don't think you're going to see the upside that some people were predicting."
