DM Wenceslao defers listing given continued market volatility
The year has turned out sour for maiden listings on the Philippine Stock Exchange (PSE), with another company shelving its initial public offering (IPO) given continued market volatility.
Last Friday, contruction firm DM Wenceslao & Associates Inc. told PSE officials the company was instead looking to go public next year.
A day earlier, the firm announced a cut in its IPO price by almost half to P25 per share from P44, which slashed expected proceeds to P10.729 billion from P18.88 billion.
DM Wenceslao was to list at the PSE on December 8.
Two weeks ago another construction company, Datem, Inc., called off its IPO due to “uncertainty in the capital markets prevailing at the time of pricing.”
The firm, which was to list also on December 8, had planned to raise up to P4.65 billion.
The deferrals leave Italpinas Development Corp. as the last remaining IPO for the year. The firm, which is looking to raise P243 million, is scheduled to list at the PSE’s smaller SME board on December 7.
Italpinas officials were not immediately available for comment.
Metro Retail Stores Group Inc. (MRSGI) was the last firm to brave market uncertainties but was forced to lower its offer price and expected proceeds. It saw a slight price gain when it listed last November 24 but its shares have since fallen.
“MRSGI IPO sapped market liquidity, and … disappointed having fallen below IPO price,” said Nisha Alicer, analyst at DA Market Securities Inc.
Last Friday, Metro Retail shares declined by 4.02 percent or 16 centavos to end at P3.82, lower than the original IPO price of P3.99 per share.
Two firms saw more success earlier in the year, ahead of global volatility arising from fears of a US Federal Reserve rate hike. Crown Asia Chemicals Corp. and SBS Philippines Corp., raised P222.78 million and P1.15 billion, respectively.
Concerns over the Fed rate hike subsided in the third quarter but were resurrected given indications that the US central bank would accelerate the “lift-off” to next month. Global markets have also been roiled by a slowdown in China.
The PSE, which initially targeted up to 10 IPOs in 2015 year, trimmed its goal to five a few months back. DM Wenceslao’s announcement means that the year will only see four listings at most if Italpinas follows through.