RPT-Developer ECM soars in Prague bourse debut

(Repeats story published late on Thursday)

By Jan Lopatka

PRAGUE, Dec 7 (Reuters) - Shares in Czech developer ECM Real Estate Investments <ECMPsp.PR> jumped as much as 16 percent in their trading debut on Thursday following the second-ever initial public offering (IPO) on the Prague Stock Exchange.

ECM shares rose to as much as 1,529 crowns in morning trade, before dipping back to close at 1,471 crowns, 11.6 percent above the IPO price of 1,318.

The smallest of the 10 stocks traded on the premium market maker-based segment of the Prague bourse, ECM posted the heaviest volume of trades, 1.08 billion crowns ($51.28 million), nearly one-third of the overall turnover.

Its newest listing and favourable prospects for other stocks helped the market scale a new lifetime high, with its blue-chip PX index <.PX> rising 0.9 percent to close at 1,614.1 points.

ECM is not yet part of the index but might be added at a quarterly update on Dec. 27, the bourse said.

ECM's debut was a welcome sign for the market and investors.

Czech companies have preferred to raise debt or seek private equity partners in recent years, the hangover of a lack of transparency on the stock exchange in the 1990s.

ECM said its offering to institutional investors, which made up 90 percent of the combined offerings, was more than four times oversubscribed and the retail offering attracted 6.6 times more interest than the shares on offer.

"Small clients have an interest and that can be seen. Most retail clients were cut back a lot in the IPO process and now they are trying to buy even at these higher prices," said Wood & Company trader Jan Pavlik.

'VALUE IS THERE'

Including the potential greenshoe option and the sale of existing shares, the offering will raise 80.75 million euros ($107.3 million).

It values the company at 262.7 million euros, including outstanding warrants which can be transferred to shares.

The company focuses on real-estate investment in the Czech Republic and is expanding in Russia.

The 1,492 market price valued the company at 298 million euros including the greenshoe option and the warrants.

Analyst Robert Keller of Patria Finance said the market price has hit his estimate of the company's worth, which he said was about 1.3 times net asset value per share.

"The value is there but the future growth potential is a question because, from the fundamental point of view, most of the projects the company has is in the phase of a tender," he said.

He said he valued the stock at about 54 euros per share, which was similar to a 50-60 range given by rival Wood and Company.

ECM's only Czech listed rival Orco <ORCOsp.PR> was valued at about 1.4 times first half NAV at Thursday's price of 2,817 crowns.

((Reporting by Marek Petrus and Jan Lopatka, editing by David Cowell

Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

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Keywords: ECM IPO/DEBUT