Does cocoa trump coffee for investors?
In IPO terms, at least, it looks that way with a high profile coffee flotation, of India's Coffee Day Enterprises, floundering on Monday even as shares in a recent cocoa listing, of Belgian-based KKO International, continued to show its investors a bit of an initial pop.
Shares in Coffee Day Enterprises, owners of India's biggest coffee chain besides property assets, ended their first day of trading in Mumbai at 270.45 rupees, down 17.6% on the offer price of 328 rupees.
The decline, at India's biggest stockmarket flotation in three years, wiped 11.9bn rupees ($180m) from the group's stockmarket value.
That was a little more than the 11.5bn rupees the company, and investors including US private equity icon KKR, raised from the flotation.
Concerns raised by analysts ahead of the flotation over Coffee Day Enterprises included its history of trading at a loss and its diversification into assets besides its 1,650-strong coffee chain, which some analysts believed rendered the offer price for the shares too rich.
Nonetheless, the IPO was 1.82 times oversubscribed when it opened last month.
In Brussels it was a poor day for KKO International shares too, which stood down 7.2% at E4.02 in late deals.
However, that still represents a 23% gain on the offer price of E3.26 per share, which valued the group, the owner of West African cocoa group Solea, at E31.6m.
KKO represents a rare opportunity to invest in a cocoa sector which some investors believe will show a structural output deficit, as a sector dominated by ill-financed, smallholders producers struggles to keep up with demand whetted by a growing Asian taste for chocolate, and economic recovery in the West.
Monday's decline in shares in KKO - which aims to be the top cocoa producer in Ivory Coast, the top cocoa-producing and exporting country - came despite a firm performance by cocoa futures on Monday, adding 0.8% to $3,285 a tonne in late deals in New York, for the best-traded December contract.
The rise in cocoa in turn defied expectations of a strong start to 2015-16 for Ivory Coast output, with exported estimating volumes delivered to ports as of November 1, one month into the season, at 280,000 tonnes, up from 216,000 tonnes a year before, according to a Reuters survey.