SEOUL, Nov. 11 (Reuters) - Shares of SK C&C Co Ltd , the technology services affiliate of top South Korean mobile carrier SK Telecom, rallied on the company's trading debut on Wednesday, but analysts said the rally could prove short-lived in a sluggish broader market.
SK C&C's debut comes amid signs Asian initial public offerings are losing steam because of renewed economic uncertainty, with many companies trimming high pricing expectations or shelving offerings because of weak demand.
Recent IPOs in South Korea, including Tong Yang Life Insurance and spirit maker Jinro Ltd, were priced at the bottom of their indicative ranges or below.
Analysts saw the strong market reaction to SK C&C as excessive in the absence of market-leading stocks.
'Under prevailing market conditions, investors seem to find the newly listed shares an attractive alternative investment,' said Yun-chae Park, executive director at Kiwoom Securities. 'We see the outlook for SK C&C as bright, but that doesn't mean the South Korean IPO market is going to improve any time soon.'
The technology outsourcing company opened at 32,250 won, above its IPO price of 30,000 won, which was set at the middle of its indicated range. The IPO raised 540 billion won ($465.7 million) for its two main shareholders, SK Telecom and SK Networks.
The stock extended its advance to 35,450 by 0325 GMT, after rising to a session high of 36,100, in contrast to a 0.33 percent fall in the benchmark KOSPI.
SK C&C's IPO has been in the spotlight because the listing was part of SK Group's restructuring into a holding company. The technology services company is the top single shareholder in SK Group's holding company SK Holding with a 32 percent stake.
'The company certainly has some merit in drawing investor attention as the third-largest system integration services provider in South Korea, after Samsung SDI and LG CNS,' said Taeyearl Rah, an analyst at Hanwha Securities.
He said SK C&C had strong fundamentals in telecommunications and finance-related service businesses, and was of strategic importance to parent SK Group.
POSCO Engineering & Construction Co Ltd., a building unit of steelmaker POSCO, cancelled its IPO last month, which had been aimed at raising $912 million.
Korea Life Insurance Co, the country's No.2 life insurer, is preparing for a $2 billion IPO, expected next year.
(Reporting by Shin Jieun and Kim Yeon-hee; Editing by Chris Lewis)
((jieun.shin@reuters.com; +822 3704 5644; Reuters Messaging: jieun.shin.reuters.com@reuters.net)) ($1=1159.5 Won) Keywords: SKC&C/SHARES/ Keywords: SKC&C/SHARES/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
SK C&C's debut comes amid signs Asian initial public offerings are losing steam because of renewed economic uncertainty, with many companies trimming high pricing expectations or shelving offerings because of weak demand.
Recent IPOs in South Korea, including Tong Yang Life Insurance and spirit maker Jinro Ltd, were priced at the bottom of their indicative ranges or below.
Analysts saw the strong market reaction to SK C&C as excessive in the absence of market-leading stocks.
'Under prevailing market conditions, investors seem to find the newly listed shares an attractive alternative investment,' said Yun-chae Park, executive director at Kiwoom Securities. 'We see the outlook for SK C&C as bright, but that doesn't mean the South Korean IPO market is going to improve any time soon.'
The technology outsourcing company opened at 32,250 won, above its IPO price of 30,000 won, which was set at the middle of its indicated range. The IPO raised 540 billion won ($465.7 million) for its two main shareholders, SK Telecom and SK Networks.
The stock extended its advance to 35,450 by 0325 GMT, after rising to a session high of 36,100, in contrast to a 0.33 percent fall in the benchmark KOSPI.
SK C&C's IPO has been in the spotlight because the listing was part of SK Group's restructuring into a holding company. The technology services company is the top single shareholder in SK Group's holding company SK Holding with a 32 percent stake.
'The company certainly has some merit in drawing investor attention as the third-largest system integration services provider in South Korea, after Samsung SDI and LG CNS,' said Taeyearl Rah, an analyst at Hanwha Securities.
He said SK C&C had strong fundamentals in telecommunications and finance-related service businesses, and was of strategic importance to parent SK Group.
POSCO Engineering & Construction Co Ltd., a building unit of steelmaker POSCO, cancelled its IPO last month, which had been aimed at raising $912 million.
Korea Life Insurance Co, the country's No.2 life insurer, is preparing for a $2 billion IPO, expected next year.
(Reporting by Shin Jieun and Kim Yeon-hee; Editing by Chris Lewis)
((jieun.shin@reuters.com; +822 3704 5644; Reuters Messaging: jieun.shin.reuters.com@reuters.net)) ($1=1159.5 Won) Keywords: SKC&C/SHARES/ Keywords: SKC&C/SHARES/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.