Cemex listing ceremonies
SHARES of Cemex Holdings Philippines rose by 3.26 percent on the cement company’s stock trading debut on Monday, bucking the overall market downturn as investors bet on an infrastructure boom under the Duterte administration.
Cemex, the first cement company to list on the Philippine Stock Exchange in two decades, closed at P11.10 per share on Monday versus the initial public offering (IPO) price of P10.75. This gave it a market capitalization of P55.9 billion on its first day of trading.
The cement company, now trading under the ticker “CHP,” raised P25.13 billion from this equity deal, about 75 percent of which was taken up by foreign investors and 25 percent by local investors.
“It did well despite the hefty offering,” said Manny Cruz, chief strategist at local stock brokerage Asiasec Equities. “I think there’s a lot of positioning from foreign institutions. They are bullish with it as they point to a possible improvement in cement sales based on the promise of the government to increase infrastructure spending to as much as 7 percent (of gross domestic product),” Cruz said.
Infrastructure spending as a ratio of GDP slipped to as low as 1-2 percent during the previous administration before rising to around 3.5 percent in 2015.
While the increase in infrastructure spending as a ratio of GDP to 7 percent may not be immediately realized until the latter part of Mr. Duterte’s term, Cruz said infrastructure spending should hit at least 5 percent of GDP in the early years of the new administration.
“From having the trust of developers and customers, Cemex now holds the trust of institutional and retail investors, as evidenced by its very well-received offering. This capital raising is one of the biggest IPOs in the history of the exchange,” PSE chair Jose Pardo said in his welcome remarks during the listing ceremony.
The company was the most actively traded stock on the PSE on Monday, with some P2.94 billion worth of shares changing hands.
The Cemex IPO is the third largest seen in the PSE, next to the P28.11 billion offering of Gokongwei-led retailer Robinsons Retail Holdings Inc. in 2013 and the P26.25 billion offering of Sy family-led conglomerate SM Investments Corp. in 2005.
The cement company exercised the option to upsize the offering by 304.947 million shares on top of the 2.03 billion primary shares offering to meet strong demand for the offering. Cemex sold 45 percent of its outstanding shares to the public at P10.75 per share.
The offshore book-building for Cemex was oversubscribed by multiple times. About 30 percent of the IPO gobbled up by “cornerstone” investors such as BlackRock Inc., Fullerton Fund Management Co. ( a unit of Singaporean state investment firm Temasek) and Avanda Investment Management.
Cemex is the third largest cement producer nationwide with around 20 percent of share of the Philippine market by sales volume in 2015, according to the Cement Industry Report. Its long-standing brands include the 75-year old APO and the 100-year-old Rizal brand. It is the largest cement producer by sales volume in the Visayas with around 40 percent share of the market in 2015.
JP Morgan, Citigroup and HSBC acted as the joint global coordinators and joint book-runners while BDO Capital & Investment was the lead underwriter.