CSG shares surge 31.4 pct to EUR32.85 on Amsterdam debut

Prague, Jan 23 (CTK) - The price of CSG arms group shares rose by 31.4 percent to EUR32.85 apiece on its first day of trading on the Amsterdam Stock Exchange today, according to the bourse statistics.

On the unregulated Free Market of the Prague Stock Exchange (BCPP), CSG shares rose today by 30.1 percent against the price upon subscription.

"CSG shares had a very successful trading session," XTB analyst Tomas Cverna told CTK. Purchases by retail clients helped exceed EUR1bn in trading volume. The average trade size was 175 shares worth EUR4,915 (about CZK120,000). "I think CSG can be satisfied with the result," he added.

Every share subscription is associated with significant volatility, said Vladimir Rak, investment analyst at Triangle Family Office. In the case of CSG, this effect was exacerbated by the fact that institutional investors practically exhausted the primary subscription immediately, while ordinary investors did not get their first real opportunity to buy until trading began, which pushed the price to around EUR32, he said.

Expectations regarding the CSG share subscription were set high even before the IPO, and the first trading days essentially fulfilled them, said Purple Trading analyst Petr Lajsek. "The sharp rise in price after the start of trading was largely due to a combination of strong oversubscribed institutional demand, limited free float, and generally very favourable sentiment toward the European defence sector," he noted.

The fact that shares stabilised after initial growth and volumes on Euronext gradually declined was not a sign of weakness, but rather a return to normal after an extremely strong start, according to Lajsek.

The difference between Amsterdam and Prague is more interesting, according to Lajsek. High trading volumes on the BCPP, where CSG significantly exceeds the liquidity of traditional stocks led by energy company CEZ, were to be expected. "For domestic investors, it is a combination of several factors: strong local patriotism, a long-term hunger for a new big story on the Czech market, and the relative simplicity of the investment thesis," he noted.

The total volume of stock trading on the BCPP exceeded CZK1.8bn today.

CSG raised EUR3.8bn (CZK92.2bn) from the sale of shares on the Amsterdam Stock Exchange today, representing 15.2 percent of its share capital. According to analysts, it was the largest share offering by an arms manufacturer ever. The valuation of the group based on the final offer price of the shares reached EUR25bn (CZK607bn), with the subscription price at EUR25 per share. During the first morning of trading, CSG shares rose by 28 percent to EUR32 per share.

CSG offered EUR750m (CZK18.2bn) worth of new shares upon its IPO, EUR2.55bn (CZK61.9bn) worth of existing shares sold by the current shareholder, and an over-allotment option of up to EUR496m (CZK12bn). The company intends to use the net proceeds from the sale of new shares for its development.

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