KUALA LUMPUR, Malaysia--Lotte Chemical Titan, a petrochemical unit of South Korean conglomerate Lotte Group, closed lower in a weak market debut Tuesday even after cutting the size of and price of its Malaysian initial public offering in Malaysia.
The company's shares opened flat at its listing price of MYR6.50. It climbed as high as MYR6.53 in the first few minutes after the opening bell before declining to MYR6.33 near noon. It closed at MYR6.38, 1.9% lower than its IPO price.
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The stock was the second most actively traded equity on the Malaysian exchange Tuesday; trading volume was worth 292.81 million ringgit ($68.13 million).
The Lotte Chemical IPO, which raised about 4 billion ringgit ($930.8 million), was Malaysia's largest listing since 2012, when pay TV company Astro Malaysia Holdings Bhd. (6399.KU) raised $1.5 billion.
Lotte Chemical's weak debut is expected to rattle the nerves of a number of companies planning to list. There has been a drought of large listings in recent years due to worries about market volatility.
But economic growth, fund flows into local markets and the stabilization of the ringgit since the start of the year have helped to lift investor sentiment.
Malaysian equities have performed well this year. Foreign investors have been net buyers of Malaysian stocks in 22 of this year's 27 weeks. The benchmark Kuala Lumpur Composite Index is slightly less than 7% higher year-to-date, though it underperformed most of its peers in Southeast Asia.
Lotte Chemical Titan's IPO plans were delayed after South Korean prosecutors charged the parent company's chairman and four of his family members with tax evasion and embezzlement in October. Lotte apologized for "causing concern" and said it would cooperate with the investigation process. In January, the chairman's sister was sentenced to three years in prison.
Lotte, South Korea's fifth-largest conglomerate, has interests in duty-free stores, luxury hotels and insurance. It has annual sales of about $74 billion and has been controlled by the Shin family since it was established in 1948.
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(END) Dow Jones Newswires
July 11, 2017 05:42 ET (09:42 GMT)