Pilipinas Shell debuts on stock mart, seen a PSEi candidate

Pilipinas Shell CFO Jerome Pascual, BPI Capital’s Reginaldo Cariaso, Pilipinas Shell prexy Cesar Romero, VP Dennis Gamab at IPO briefing

Oil refining and distribution firm Pilipinas Shell Petroleum Corp., which debuted on the Philippine Stock Exchange on Thursday, is seen as a good candidate for the 30-company main local stock barometer.

“Pilipinas Shell has a very good potential to be part of the (Philippine Stock Exchange) index given the significant market capitalization,” BPI Capital managing director and chief operating officer Reginaldo Cariaso said on Thursday.

At its initial public offering (IPO) price of P67 per share, Cariaso said Pilipinas Shell would have an initial market capitalization of P108 billion while noting that its public float of as much as 28 percent could provide a lot of potential for trading liquidity.

“It’s a stock that one can consider for inclusion to the main index in due course,” Cariaso said in a press briefing after the company’s listing on the PSE.

“It’s also a very good indicator for the overall Philippine economy,” he added.

BPI Capital is the domestic lead underwriter and bookrunner for the IPO, which could raise as much as P19.5 billion if the overallotment option is exercised. JP Morgan acted as global coordinator and international bookrunner.

Shares of Pilipinas Shell – which listed under the ticker SHLPH – ended slightly higher during the company’s listing on the PSE despite a backdrop of gloomy local and regional stock markets. Risk appetite was low during the run-up to the US presidential elections on Nov. 8.

At the end of the trading day, the newly listed firm’s shares rose by 0.3 percent to close at P67.20 per share. On the other hand, the PSEi fell by another 1.26 percent or 91.49 points to end at a six-month low.

At the local market, some investors who bought Pilipinas Shell’s IPO shares cited the potential inclusion in the PSEi – like its peer Petron Corp. – as an incentive to hold on to the stock alongside its very generous dividend policy.

Pilipinas Shell has set an annual dividend policy of paying out 75 percent of the previous year’s net profit.

“We made it the minimum. We’re historically going as high as 100 percent (in terms of annual dividend payout) but we’re giving management the flexibility to manage our cash flows moving forward. We think it’s a very superior dividend policy,” said Pilipinas Shell chief finance officer Jose Jerome Rivera Pascual IIII.

Pilipinas Shell is the third company to complete an IPO at the local stock market this year.

“We are delighted with the overwhelming response received by Pilipinas Shell Petroleum Corp. from investors globally and see it as a vote of confidence in the future of the company and in its leadership,” said Cesar Romero, the newly appointed company president.