EYES are on food manufacturer Monde Nissin Corp.’s stock market debut on Tuesday, analysts said, as the investing public tune in to see how the P55.9-billion initial public offering (IPO) would perform amid uncertain times.
“This largest IPO (initial public offering) in the country would test waters and signal more deals to come,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a text message on Sunday.
Monde Nissin is offering 3.6 billion common shares priced at P13.50 each, with an overallotment option of 540 million common shares. It will be listed and will trading at the Philippine Stock Exchange under the ticker symbol “MONDE.”
“[It] was priced higher than its local counterparts based on its price to earnings valuation,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a separate text message on Sunday.
“Its income growth was mainly attributed to reduce in [interest] expense on repayment of loans in 2020 and foreign exchange gains which is not organic growth in nature,” Mr. Pangan added.
The company said its record IPO attracted “overwhelming interest” during its book-building process, resulting in being multiple times oversubscribed.
“Some participants, especially for those who were not able to subscribe to Monde [Nissin] shares during the offer period, may have opted to save up on some buying power to be able to participate in [Monde Nissin’s] listing day on Tuesday,” Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a Viber message on Sunday.
“Other traders might stay on the sidelines during [the] listing date to observe how the market sentiment towards the stock would be,” he added.
However, the offer is also said to be a sign of improved sentiment from investors overseas. Monde Nissin was able to secure 11 global cornerstone investors for its maiden offering.
“The country’s biggest IPO signals increased international investor confidence on the country’s economy and financial markets amid relatively favorable credit ratings recently despite the COVID-19 (coronavirus disease 2019) pandemic,” Mr. Ricafort said.
This may also suggest that market conditions in the country are “conducive and favorable,” paving the way for more IPOs, including real estate investment trusts, share sales, and other fund-raising activities in the Philippines’ capital markets.
“Local market conditions have somehow improved a few days before its listing date,” Timson Securities’ Mr. Pangan said. “We’ll have to observe how this impacts foreign investors’ participation in the local bourse.”
“Investors will have to observe how [Monde Nissin] achieves its guidance reports and its plans to expand its production and technological capacities, globally,” he added. — Keren Concepcion G. Valmonte