By Anthony Morgan

Future Energy Source Company’s share price rose over 30% on day one of listing on the Jamaica Stock Exchange (JSE) over a week ago and continues to trade at a relatively stable price above a dollar.

The company started trading at $0.80 and was up to $1.06 by day’s end, a situation which THE ANALYSTS said was not unusual for that category of listing on the market.

Research and Strategy Analyst at Sagicor Investments, Jodian Aris,

“Typically with small offerings you normally see a big uptick or demand upon listing so we expected Fesco would have done similarly,” said Research and Strategy Analyst at Sagicor, Jodian Aris.

FESCO became the first Junior Market company to be added to the Jamaica Stock Exchange (JSE) since the start of the year, after raising $400 million from its initial public offering (IPO).

The IPO closed a day after opening on March 31 due to oversubscription. Aris said analysts were therefore anticipating a jump in the share price in the first few days of trading.

“It’s an IPO so we would have expected to see some movement closer to a dollar thereabout in the initial first day of trading based on the basis that there was heavy demand,” she said. 

“When you look at the allocation you would have realized that there were probably quite a bit of persons who wanted exposure to that sector who may not have been able to achieve it and the size that they wanted based on an allocation so there would be demand for that one,” she added.

From the basis of allotment announced before the listing, brokers got 100% of what they had applied for. NCB Capital Markets got 100 million shares while NCB Insurance Agency & Fund Managers got 16.2 million shares. 

The remaining 58.7 million shares that were in the Broker Reserved pool which were not applied for were transferred to the General Public Pool.

Subscribers to the General Public Pool only received their first 1,000 shares plus 44% of the excess shares.

FESCO employees and Key partners also came up short, with staff receiving up to the first 50,000 shares plus 72% of the remainder, and partners getting up to the first 250,000 shares plus 80% of the remainder.

Wealth Advisor at Ideal Portfolio Services, Dwayne Taylor agreed that this allocation could have influenced the quick movement of the share price after listing.

Wealth Advisor at Ideal Portfolio Services, Dwayne Taylor

“Normally for these small uptakes, we find that the stock price does skyrocket especially in the first 2-3 days as persons are maybe trying to capitalize on whatever capital gains they would have been able to get from the market,” he said. 

Taylor also said he wouldn’t have been surprised if the price had skyrocketed to $1.30 just off that demand in week one.

However after its first week as a publicly traded company, the stock was still hovering around the $1.00 mark. It’s highest point of $1.10 was on April 26, dropping back to $1.05 the next day.

“I’m just excited to see how it progresses,” he said.

FESCO now has 4,495 shareholders. It’s $400 million dollars brought the overall capital raised by companies on the market to date to over $12 billion. 

The listing also brought the JSE’s Junior market capitalization close to $150 billion and the overall market capitalization to over $1.7 trillion.

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