Successful stock exchange debut for Promina

By ELLEN READ

Promina shares got off to a flying start yesterday, debuting on the New Zealand stock exchange at a 6 per cent premium.

The shares listed locally at $2.15 against a A$1.80 ($2.03) price to institutions before listing. Turnover was a hefty 14.4 million shares with the price closing at $2.18.

"It looks like it's been pretty successful," UBS Warburg's Richard Leggat said.

In Australia the stock started trading at A$1.94 and by 5pm (NZ time) 217 million shares had traded. Merrill Lynch stood out as a particularly heavy trader.

Typically around 8-10 per cent of a new issue trades on debut, Direct Broking's Brett Wilkinson said, so for over 20 per cent to trade was exceptional, although not a total surprise given that the issue was heavily oversubscribed. "It indicates that buyers are soaking up the stags," he said.

Promina shares will be included in the NZSE-50 index from June 3. The company's weighting will be calculated on the proportion of its revenue earned in New Zealand.

Promina has been spun off by Britain's second largest insurer Royal & Sun Alliance to raise funds. Institutional investors paid A$1.80 for each of their shares while retail investors paid A$1.70 or $1.90 in New Zealand.

Institutions were allocated 74 per cent of the just over 1 billion shares issued and retail investors 26 per cent. The shares had been scaled back to meet demand.

The company would have just over 40,000 shareholders.

Of the 242 institutions spoken to during a round-the-world road show, just four had not bought shares, Promina managing director Michael Wilkins said.