Biz Buzz: Hurt by Apec
Preliminary estimates about the actual losses businesses incurred due to the stoppage during last week’s hosting of the Asia-Pacific Economic Cooperation (Apec) summit are hard to find. But anecdotal evidence has started to emerge and the numbers don’t look pretty. And let’s not even talk about the local airline industry, which was said to have lost more than P2 billion in a single week due to flight cancellations and rebookings.
Biz Buzz has learned that more than 800 tenants of the SM Mall of Asia—the flagship shopping mall of the SM group—have reported sharp drops in sales all of last week. This was because MOA was right in the nexus of the Apec activities, with the leaders’ summit happening at the nearby Philippine International Convention Center. Of course, the dinner gala for 21 world leaders and a few thousand VIPs was also held at MOA, necessitating a security lockdown that affected businesses over at the adjacent mall.
But don’t shed tears for the SM group because its owners, the Sy family, is the country’s wealthiest and has a net worth of more than $14 billion. One week’s worth of lost sales is a drop in a bucket that will probably be written off as a rounding error in this year’s financial reports. Instead, shed tears for the small and medium enterprise owners who make up the bulk of MOA’s tenants.
Weak sales for them for even just a week has a dramatic pass-on effect down the line, translating to weaker sales for other companies that manufacture their goods, as well as laborers and raw material suppliers down the line.
According to a Biz Buzz source, the preliminary losses to SMEs due to the Apec-related holidays, and trade and banking stoppage was estimated to be at least P10 billion. Ouch.
And to think, this Apec summit was supposed to be focused on helping SMEs improve their lot. It looks like the immediate effect was the exact opposite. Daxim L. Lucas
Lower IPO price
INTEGRATED construction and property development group DM Wenceslao and Associates Inc. (DM) is accepting a lower initial stock offering (IPO) valuation against volatile financial markets. The construction and infrastructure group has pared the maximum IPO price to P25 a share—a 43.2-percent reduction from the P44 price cap previously.
The new price cap will allow DM Wenceslao to raise as much as P12.34 billion from the stock debut if the option to upsize is exercised. At the previous price cap, the company would have raised up to P21.7 billion (most new issuers in recent history have priced their offering at levels lower than the initial maximum price indicated during the first filing of registration statement).
Final IPO pricing is expected by Dec. 4. The offering will run from Dec. 9 to 15 this year while listing date is set on Dec. 22 or shortly before the Christmas break.
DM Wenceslao intends to use majority of net proceeds from the offering to fund pipeline projects and expand its land bank. The company also intends to finance the development of infrastructure within Aseana City. Ahead of the IPO, it has signed a deal with the local unit of Hongkong Land, a regional property firm under the Jardine Matheson Group, to jointly develop a 2.6-hectare parcel of land in Aseana City.
Incorporated in the Philippines in 1965, DM Wenceslao has completed more than 100 land reclamation and construction projects and developed three commercial buildings in Aseana City. Doris Dumlao-Abadilla
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