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By Likha C. Cuevas-Miel Reporter
LOCAL investors scrambled to buy
shares of the Philippines’ biggest beer
maker, as the offering was already sold out ahead of its closing
today, its underwriters said.
Roberto Benares, ATR KimEng
Capital Partners Inc. managing director, told The Manila Times that
San Miguel Beer Inc.’s (SMB) household name was the main draw for
retail and institutional buyers.
Domestic investors bought about
30 percent or P1.85 billion of the total shares on offer, while the
rest were allocated for offshore buyers. SMB sold 770.5 million
shares at P8 each for a total issue size of P6.16 billion or 5
percent of the company. The total up for listing at the local bourse
on May 12 is divided into 77 million new shares and 693.5 million
old ones held by existing stockholders.
Benares said worries about the
growth story of SMB failed to deter locals from buying the shares
although their foreign counterparts had initial qualms about the
company’s mature market. According to San Miguel Corp. officials,
its beer operations already captured 95 percent of the market,
causing investors and analysts alike to worry that the company has
no way to go but down lacking room for expansion.
Benares said SMB officials
assured foreign investors that there is still growth for the company
since the beer market is expanding in tandem with the Philippine
economy, which is expected to grow by at least 6 percent by
year-end. In addition, SMB told foreign investors that the company
will attempt to eat into the hard liquor market to grow the beer
market.
Some analysts however are still
wary of the company’s growth prospects. In its research note on
April 29, Citiseconline said soaring food prices should be the
biggest worry for a beer maker. In March, inflation reached a
20-month high of 6.4 percent.
“Beer sales will be negatively
affected as high inflation weakens consumers’ purchasing power,”
the online brokerage firm said.
Besides people’s reallocation
of their income to basic commodities, SMB is also confronted by
rising prices of raw materials like malted barley and hops.
Eduardo Francisco of BDO Capital
and Investment Corp. told the Times that investors are still in a
win-win situation given that the shares are like “fixed income
instruments.” SMB shares could bring in 8 percent dividend yield,
which is already attractive if these shares are held for a long
period of time, he said.
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