Taiwan Cellular Corp (台灣大哥大) will list today during Taiwan's worst bear market, sparking much speculation.
The stock market dropped beneath the psychologically important 7,000 point barrier yesterday, ending at 6,910.14 points, a low not seen in Taiwan since Aug. 1999, and analysts expect the drop to continue.
"This is not a good market to open in," said David Tung (童大偉), international department manager at EnTrust Securities (永昌綜合證券).
Nevertheless, Tung expects Taiwan Cellular to potentially rise to its 7 percent limit on a "one day honeymoon," but after the first day to corporation will be "riding with the rest of the market."
Taiwan Cellular officials appeared optimistic, pointing out that the public offering is Taiwan's first pure-play wireless telecommunications stock and that, "even if the domestic market is on a downward trend, world markets and especially wireless [stocks] are not following the same trend," said William Newton, vice president of Taiwan Cellular.
The company, Taiwan's first private cellular phone service provider to become listed, is to open on the TAIEX over-the-counter market at a price of NT$86 per share, close to its current price on Taiwan's gray market (quasi-legal trading).
The company has already sold 10 million shares -- from a total 2.76 billion outstanding -- by subscription at an issuance that drew "over 100,000 applications," according to Tung, despite having only enough shares to cover 10,000 applications. Shares in Taiwan are sold in blocks of 1,000 at a time.
The amount of applications received for Taiwan Cellular stock has put state-owned Chunghwa Telecom's stock issuance to shame. Chunghwa sold only 43 percent of the 1.5 billion shares made available in a subscription offer beginning last month.
For Taiwan Cellular, this issuance also qualifies it to list on overseas markets.
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