THE beauty of Jennifer Hawkins and the brains of Bernie Brookes were yesterday unable to counter the tide of bearish investor sentiment engulfing markets from Wall Street to Melbourne. Myer shares fell almost 10 per cent on debut and sent a shiver up the spine of other companies preparing to float.
Retailers such as Kathmandu, which kicked off a $380 million IPO last month, and sports equipment store Rebel may be forced to rein in their raising projections as equity markets go into a tailspin.
The benchmark sharemarket index last week fell 4.5 per cent and yesterday gave up another 2.2 per cent as Myer chief executive Mr Brookes, chairman Howard McDonald and store ambassador Ms Hawkins gathered to welcome Myer back on to the public boards as a stand-alone company after a 24-year absence.
Priced for retail and institutional investors at $4.10 a share, Myer stock opened at noon at $3.88 - a discount of 5.4 per cent. The shares later traded as low as $3.70, down 9.75 per cent, before ending the day at $3.75. Over the course of its first day as a public company, 130 million shares, worth $500.6 million, changed hands. At the close, Myer had a market capitalisation of $2.19 billion.
Myer's disappointing day was in line with the performance of other retailers. David Jones was 2.1 per cent weaker at $5.25, Harvey Norman fell 2.3 per cent to $3.90 and JB Hi-Fi slipped 2.4 per cent to $20.30.
Investors will see if Wall Street's losses will extend further into the month while an expected 25-basis-point increase in interest rates today by the RBA could further erode confidence and the finances of leading retailers such as Myer.
Mr Brookes put a positive spin on the debut. ''I think the market always finds its own level,'' he said. ''It's never our role to actually set the price. Our role is to provide the metrics of sales and profit and then the market sets it.''
He said he was not expecting a buoyant Christmas trading period.
