Local investors snap up Italpinas IPO


Shares hit ceiling on debut, close up 17.22%

NEWLY listed property developer Italpinas Development Corp. (IDC) saw its maiden share sale take off, mostly from enthusiastic retail investors.

It listed on the Philippine Stock Exchange (PSE) Monday, despite the volatilities hounding the market. IDC’s shares jumped to its ceiling price within the day, surging by 50 percent or P1.80 to P5.40 per share when the market opened. Its IPO was priced at P3.60 apiece.
At the close, the shares pared down gains to 17.22 percent or 62 centavos to close at P4.22 per share.

Leonardo Arguelles Jr., managing director of Unicapital Inc., said that the overall initial public offering (IPO) was oversubscribed by 3.5 times, 60 percent of which were taken up by retail investors who accounted for 2.5 times of the oversubscription.

“Basically, the LSI [local small investors]oversubscribed by about 2.5 times, and then the order book was about 3 times . . . It was a surprise as the demand from LSI was normal at 10 percent. Historically speaking, about 10 percent to 20 percent at most. But this time around, it was 2 times overbooked,” Arguelles said in a press briefing on Monday after the IDC listing on the PSE.

“Meaning to say that we now see a lot of retail investors putting their money in the stock market, and I believe this is a growing trend that will eventually accelerate,” he added.
Luis Limlingan of Regina Capital Development Corp. said the IDC shares did well with the help of the buying power of retail investors.

“The reception was good. There were just some selling, but it could have been higher. It is small for bigger funds [to invest in], but regardless, it did well because of local investors,”
Limlingan said, citing the IDC’s IPO size of P207.44 million.

Moving forward, the company plans to launch three to five projects next year with its IPO money. The three to five projects are expected to be completed within two years.

“We have been doing one project every two years before . . . We want to grow, but we don’t want to be the biggest. We want to be the best in what we do [which is sustainable and environmentally friendly projects]. We’re building three to five projects in the next two years,” Romulo Nati, IDC chairman and chief operating officer, said in the same briefing.

Three of five the projects in the pipeline will be launched in the first half of 2016, with the other two in the latter part of 2016.

Only two of the five have been finalized̶Primavera City in Pueblo de Oro Business Park in Cagayan de Oro City, and Miramonti in Santo Tomas, Batangas. The three others are still in the planning stage.

IDC President Jose Leviste 3rd said the company’s strategy is to build “design driven” projects catering to a Philippine market that is becoming “more sophisticated.”

“This is the right time for this value proposition. We are also looking at an alternative place. We wanted to be ahead of the growth, even before the growth comes,” Leviste said, citing the firm’s inclination to places where competitors are not yet present.

He said the group caters more to the overseas Filipinos and foreign investors and expatriates in the country.

Nati said the company is also in “preliminary discussions with companies . . . to join forces, to go into the tourism business.” This is in line with IDC’s long-term plan to engage in hotels and commercial offices, mainly catering to business process outsourcing sector.

In the event of an interest rate increase this month, Nati said the company is “very much prepared” for any rate hikes as the company was immune to a double-digit interest rate environment in the Philippines back when they started with the interest rate hovering at 11 percent.

IDC is a joint venture between Italian architect Romolo Valentino Nati and Filipino lawyer Leviste and his father Jose Leviste Jr.

Last IPO of 2015

Limlingan said it is unlikely that other firms will still push for an IPO, given that the market has three weeks of trading left for 2015.

‘’I think there would be none [to follow for IPO listing for 2015]. After Christmas, basically, there is very minimal participation. All are in holiday mode already. The five working days during the Christmas holidays are usually being snubbed by investors,” Limlingan said.

For the benchmark PSEi, Limlingan said the market will still wait for the December 15 to 16 meeting of the US Federal Reserve to determine what positions to take, and if a Christmas rally would indeed materialize.


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