March 26 (Bloomberg) -- Empresa Constructora Moller y Perez-Cotapos SA fell in its debut as investors who padded their orders for the engineering group’s shares were left holding more than they wanted after demand was lower than expected.
Moller retreated 2.9 percent to 388.46 pesos at the close of trading in Santiago. The Ipsa benchmark index advanced 0.7 percent.
The company sold 105 million shares at 400 pesos each in an initial public offering today, raising about $89 million, according to a regulatory filing. The stock fell as investors who had offered to buy more than they thought they would receive were allocated more than they expected at the IPO and were selling the remainder, German Guerrero, a partner at brokerage MBI Servicios Financieros, said in a phone interview from Santiago.
“In a typical IPO in Chile, investors are allocated about 20 percent of the shares they offer to buy, and in this case they got much more than that,” Guerrero said. “It means that at that price, demand from the market wasn’t very high.”
Investment funds and pension funds were allocated 94 percent of the shares they offered to buy, while retail investors were given 79 percent, according to a statement on the exchange’s website.
“In a choppy environment like this one, investors also tend to overlook cyclical sectors such as engineering and construction,” Guerrero said.
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