• Pilipinas Shell likely candidate for PSEi – analyst

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    NEWLY listed oil refiner and distributor Pilipinas Shell Petroleum Corp. [SHLPH] has potential for inclusion in the top 30 stocks that make up the Philippine Stock Exchange index (PSEi), an analyst said on Thursday.
    Shell closed slightly firmer on its trading debut on the Philippine Stock Exchange (PSE) Thursday amid sluggish markets as the world braces for next week’s US presidential elections.

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    “SHLPH managed to edge slightly higher on opening day with 32 million shares worth P2.156 billion traded. Despite the less than stellar performance, the company was able to perform much better than the PSE index as a whole, which fell by 1.26 percent,” Luis Limlingan, managing director of Regina Capital Development Corp., said in a text message.

    Shell closed at P67.20 per share, up by a marginal 0.30 percent or 20 cents from the offer price of P67 each, as fears of a possible Trump presidency weighed on investor sentiment both here and overseas.

    The company’s initial public offering of 291 million common shares was oversubscribed and generated for the oil refiner some P18.4 billion in fresh funds.

    BPI Corp. senior managing director Reginaldo Cariaso said Shell has what it takes to be included in the top 30 stocks in the PSEi due to its significant contribution to the economy and its growth potentials moving forward.

    “It’s a stock that should be considered for inclusion in the index since it’s a good indicator for the [economy],” Cariaso said in a press briefing after the Shell listing ceremony on Thursday.

    BPI served as the domestic lead underwriter and domestic bookrunner of the IPO.

    The P18.42 billion funds raised from the IPO came from the subscribed base offer amounting to 275 million primary and secondary shares. Shell still has 16 million secondary shares in its overallotment option. If this overallotment option is subscribed, Shell would be able to raise a total of P19.497 billion, which is equivalent to a 17.3-percent public float of the company.

    “We have laid down the overallotment coupon, but as per regulation, we still have 30 days to sign the overallotment option. We haven’t done so yet, we’ll notify the regulators,” Cariaso said.

    Only about 10 percent of the funds raised from the IPO will go to Pilipinas Shell while the 90 percent will go to the selling minority shareholders—Shell Overseas Investments BV, The Insular Life Assurance Company Ltd., and Spathodea Campanulata Inc.

    Delayed compliance

    Shell’s listing on Thursday is about two decades late. Republic Act 8479, or the Downstream Oil Industry Deregulation Act of 1998, stipulates that oil refiners must publicly list at least 10 percent of their common stock shares on the local bourse within three years from the time the law came into force.

    “By its entry to the stock market, Pilipinas Shell subjects itself to State regulation and public scrutiny on another front—this time as a publicly listed company,” Department of Energy (DOE) Secretary Alfonso G. Cusi said in his keynote address during the listing ceremony.

    The Energy chief led the ringing of the PSE bell together with the new and former Shell country chairmen Cesar G. Romero and Edgar O. Chua, respectively, as well as other Shell executives and PSE board directors.

    Shell has said it plans to invest $10 million to $20 million yearly to hit its target of 1,200 service stations by 2020. As of end-June, the company operated 996 retail service stations nationwide.

    Pilipinas Shell is the second largest oil refiner in the country next to Petron Corp. in terms of volumes sold. It owns an oil refinery in Batangas — one of only two in the country — which produces 110,000 barrel of fuel per day. It has recently undergone an upgrade to deliver Euro 4 compliant fuels.

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