(MENAFN- Muscat Daily) Shares of Phoenix Power Co which operates Oman's largest power plant in Sur hit the ground running in their market debut on Monday. The stock opened at 154bz 40 per cent above its initial public offering (IPO) price of 110bz.
The shares listed on the Muscat Securities Market (MSM) under the ticker 'PHPC' closed the day at 150bz per share locking in a 36.36 per cent gain.
According to market watchers nearly 129mn shares of Phoenix Power changed hands on first day of trading. This is over 25 per cent of the volume offered in the IPO.
'Volumes were quite high. There was huge demand for the stock' said Arafat al Asad vice president of asset management at National Securities said. 'Power stocks are very much in demand and added to that Phoenix Power operates the largest power project in Oman. This is an investment stock and I think the price is attractive even at current level for long-term investors especially institutions and funds. In view of the demand the stock could see more upside.'
Phoenix Power raised about RO56.3mn by selling 511910511 shares representing 35 per cent of the issued share capital of the company.
The IPO was oversubscribed by more than 18 times and collected over RO1bn in one of the largest in the sultanate.
Phoenix Power shares dominated MSM's trading session on Monday accounting for over 97 per cent of market turnover. The benchmark MSM30 index closed flat.
Suresh Kumar head of research at Al Maha Financial Services said strong demand from institutional investors is driving Phoenix Power higher. 'Power companies in Oman are known for good dividend yields. Even at 150bz per share the dividend yield is quite attractive. It is good to accumulate the stock for the long term.'
At the IPO price Phoenix Power projected an average dividend yield of 7.3 per cent until 2019 compared with an average dividend yield of 5.9 per cent for other power companies listed on the MSM. The first dividend will be paid nest month and twice yearly thereafter.
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