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Russia's Comstar and Trader Media East completed their IPOs on the London Stock Exchange this week, but amid shaky equity markets, both companies were battered in the aftermarket and have failed to trade above their issue prices.
Comstar is the telecoms subsidiary of Sistema, the Russian holding company, while Trader Media East (TME) provides online and print classified advertising in central and eastern Europe.
On Monday night, Morgan Stanley priced TME's $650m IPO twice covered at $13, the mid-point of the $11.50-$14.50 range.
The sale of 50m global depositary receipts (GDRs) places 100% of the company in freefloat, after its parent company, Trader Media Classified, elected to sell out entirely. But on Tuesday -- its first day of trading -- TME traded down 5.4% to $12.30. The GDRs clawed their way back to $12.50 on Wednesday and yesterday (Thursday) they closed at $12.43, 4.4% below the issue price.
The book comprised 120 institutions, with two thirds of the deal bought by long-only investors.
One banker on the deal defended the pricing, and blamed a dip in the equity markets for the poor aftermarket performance. The FTSE 100 fell 0.44% on Monday to 5746.79 and 3.8% on Tuesday to 5725.09.
"This was fair pricing, and in hindsight, we will look back on this as a fair price," said the banker.
Competition between TME and Comstar for the same investors' attention may also have put pressure on...