SHARES in Cemex Holdings Philippines, Inc. were volatile last week amid panic selling prior to DMCI Holdings, Inc.’s announcement of its acquisition of Cemex Asian South East Corp. (CASEC).
Data from the Philippine Stock Exchange (PSE) showed a total of 403.63 million shares worth P652.81 million were traded from April 22 to 26.
Shares closed at P1.36 apiece last Friday, falling 37% from its P2.16 close on April 19.
Year to date, the stock has surged by 44.7%.
Jervin De Celis, equity trader at Timson Securities, Inc., said in an e-mail that the stock had been experiencing volatility since Monday as players were clueless why the stock fell to P1.68 apiece.
“This fueled the speculation that there might have been issues with the deal between DMCI and Cemex Asian South East Corp., which owns 89% of Cemex. That speculation caused panic selling in the stock for two days before it bounced back on Wednesday and continued its ascent to [P1.90] on Thursday before any disclosures were published on PSE EDGE,” he said, referring to the disclosure system of the local bourse.
“[Last] week, an official statement confirmed the Cemex acquisition,” Jemimah Ryla R. Alfonso, an equity analyst at Regina Capital Development Corp., said in a separate e-mail interview. “However, this time around, the speculated acquisition price is lower than what was previously expected, leading to a decline in Cemex’s stock price [last] Friday.”
In a disclosure on Thursday, Cemex announced that DMCI, Dacon Corp., and Semirara Mining and Power Corp. would be acquiring CASEC, the majority owner of Cemex, in a share purchase agreement for $305.6 million.
“This acquisition will give DMCI another stream of revenue and will complement its property, construction, and infrastructure segment,” Mr. De Celis said.
Jemimah Ryla R. Alfonso, an equity analyst at Regina Capital Development Corp., said in a separate e-mail that Cemex could provide DMCI with the capacity it needs as it eyes to expand its cement business.
Cemex’s operations are expected to continue as usual prior to the closing of the transaction expected within the year.
The company’s revenues reached P17.32 billion last year, 15.8% down from P20.57 billion in 2022.
Cemex’s attributable net loss doubled to P2.02 billion last year from P1.01-billion loss in 2022.
Mr. De Celis said he does not expect the volatility to continue this week as players digest the disclosure by DMC.
“Future announcements such as Tender offers, and regulatory hurdles are developments to watch out for,” he added.
Mr. De Celis placed his potential short term support level at P1.23 to P1.25. He added that panic selling and uncertainties regarding tender offers make it difficult to plot a resistance level for the stock.
Ms. Alfonso placed the support level at P1.23 and the resistance at P1.40. — Karis Kasarinlan Paolo D. Mendoza
