Alternergy, bank fears seen to set tone for IPOs
By Adrian H. Halili
UPCOMING market listings could be influenced by Alternergy Holdings Corp.’s initial public offering (IPO) last Friday along with investor sentiments over the banking crisis abroad, analysts said.
During its market debut, Alternergy shares hit a high of P1.30 per share before closing at P1.28 apiece, unchanged from its set listing price, to raise P1.62 billion.
The renewable energy developer is the first company to hold an IPO this year, offering 1.15 billion in primary common shares with an over-allotment option of 115 million shares.
AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message that due to circumstances abroad, investors might turn choosy.
“Investors are likely to be selective in the upcoming IPOs, prioritizing growth industries and quick retail plays,” Mr. Temporal said.
He added that investors might prioritize immediate profits to maintain adequate buying power as listed shares are priced at a bargain.
“Cautious sentiments [are] likely to linger due to rising fears of a recession abroad amidst the global banking turmoil. This was confirmed when the [US Federal Reserve] acknowledged the issues and labeled it as a threat to the US economy,” Mr. Temporal said.
Meanwhile, Mercantile Securities Corp. Head Trader Jeff Radley C. See said Alternergy’s performance would set the tone for the next IPOs this year.
In a media briefing on Friday, Alternergy President Gerry P. Magbanua said that the company in for the long run as several projects are slated for completion in the next three to five years.
“We don’t look at it on a day-to-day basis but rather we look at it on a long-term basis because the value of the company is really based on the projects in the next three to five years,” Mr. Magbanua said.
“We hope we could successfully launch all of these projects [within] the timeframe and we’ll see the value of the stock at that point,” he added.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message that Alternergy opened below its IPO price as investors were anxious and just wanted to cash out.
“But it did stage a recovery to close flat, back at its IPO price,” he said.
Mr. Arce said Alternergy’s performance was mainly caused by investor sentiments amid issues over global financial stability.
“Though its maiden performance was far from stellar as many would have hoped, there were positives that [Alternergy] gained from its IPO,” Mr. Arce said.
UPCOMING IPOs FOR THE YEAR
Upson International Corp. will be next to hold its IPO on April 3, which could raise up to P1.95 billion for the information technology retailer.
In its final prospectus, the company stated that it plans to sell about 625 million common shares with an over-allotment option of 62.5 million shares. These are priced at P2.40 apiece.
Upson said that it plans to use IPO proceeds to open 250 stores this year within the National Capital Region and key cities in Luzon, Visayas, and Mindanao. Its offer period is slated from March 21 to 27.
Likewise, property developer Ovialand, Inc. has recently submitted for regulatory approval its intention to raise up to P2.22 billion in an IPO to fund ongoing and future real estate projects.
The company stated in a press release that it intends to offer up to 396 million common shares, which include 336 million primary common shares, 24 million secondary common shares, and an over-allotment option of up to 36 million secondary common shares. Its proposed IPO could be offered up to P5.60 per share.
SB Capital Investments Corp. was tapped as the sole issue manager, lead underwriter, and sole book runner for the offering.
Additionally, Razon-led Prime Infrastructure Capital, Inc announced its intention to launch its IPO this year after postponements last year, Reuters reported.
It plans to offer up to 1.93 billion shares, which include an over-allotment option, priced at up to P14.60 per share.
The proposed offering could bring P27.72 billion in proceeds, which the company can use to finance its energy, water, and sustainable fuels businesses.
Bounty Agro Ventures, Inc. has also stated its intention to list later this year to raise up to $400 million to $500 million, Bloomberg reported.
Meanwhile, Citicore Renewable Energy Corp. stated in February that it was also planning to go public this year to fund $4 billion in solar power projects over the next five years.
Earlier in the year, the Philippine Stock Exchange said that it was targeting 14 IPOs this year, 11 of which are said to be companies and real estate investment trusts or REITs that will list on the main board and three on the small, medium, and emerging board.