Parkin PJSC Logo Artwork Dubai
Retail investors wanted more of Parkin - and many found they couldn't get them on the first day of its listing on DFM. Image Credit: Supplied

Dubai: For many retail investors in the UAE wanting to add more Parkin shares to their portfolio on the first day of listing, there was only disappointment.

“We tried buying through trading apps and the deals just wouldn’t go through all through yesterday,” said one investor. “It was extremely disappointing, because the intention was to buy more before the price escalated. For that, I had to place then orders in the initial minutes of its opening – and I couldn’t all of yesterday.”

He wasn’t the only one left in the lurch. Multiple day traders experienced the same hurdle on their online trading apps, whether that’s one provided by their bank or a third-party standalone platform.

In a statement, Emirates NBD said: “Due to the overwhelming response to the Parkin trading launch, some customers may have experienced intermittent timeouts on ENBD X (the app) while trading this morning (March 21). Other trading activities in local and global markets, as well as mutual funds, were not impacted."

Based on market talk, other trading apps and investors on them found themselves in the same situation. (Buying through these do not require investors to have NINs (National Investor Number).)

As expected, Parkin’s stock zoomed on its DFM opening, hitting 30 per cent up instantly and then stabilizing around the 26-27 per cent up mark before making another rush closer to the close of trading day. It ended 35 per cent higher.

"Retail investors flooded the system with buy orders (especially since the post IPO subscription allocations were infinitesimal)," said Sameer Lakhani, Managing Director at Global Capital Partners. 

"Market stabilization companies have been appointed for exactly these type of scenarios and keep the bid spreads as narrow as possible. But system glitches occur, as they have done for IPOs like Google and Snapchat from time to time. Such occurrences are rare - but they do reflect the burgeoning demand from retail investors for new IPOs/listings in the UAE."

What next for Parkin stock

The stock will start its second day on DFM at Dh2.84. Its IPO price was Dh2.1. During the subscription, 63,000 retail investors put in their funds for a share of the 12 per cent of the issued capital open for them. At the time of the initial IPO announcement, these subscribers were earmarked a minimum 2,000 shares each, but the subsequent level of over-subscription meant they ended up with fewer.

Not just Parkin, gold too
There were other investors who had trouble getting their deals through on online trading platforms - but this was about selling gold through these digital means. Gold had gone past $2,200 for first time ever on March 21, set off by the latest round of announcements by the US Federal Reserve.

Sellers holding gold positions trying to sell and do some profit taking found their portals were not sealing the deals through most of yesterday. Again, it could be that a lot of investors had the same ideas about profit taking at the same time, and that overwhelmed the portals.

Some profit taking too

On the first day, the stock after its initial soar also saw a bit or profit taking from some of its investors, and which then fed another round of buying closer to the day's end, analysts say.

Now, investor attention will partially direct towards the next big IPO looming in the UAE stock market horizon. LuLu Group has sounded out bankers for its listing process, according to Bloomberg. The Abu Dhabi headquartered hypermarket operator had mentioned H2-24 as the most likely timeline for the IPO.

"There is a chance that UAE could see a couple of other IPOs happen before that," said an analyst. "The market buzz surrounding a couple of private entities wishing to float is building up, and Abu Dhabi itself could see another  big one."

More to follow...