Eagle rises on stock trading debut

Shares of Eagle Cement Corp., which aims to be the country’s leading cement producer in the next few years, outperformed the local stock barometer on inaugural trading on Monday.

Eagle gained P0.30 or 2 percent to close at P15.30 per share from its initial public offering (IPO) price of P15 per share. It was the most actively traded company at the local bourse, with total value traded amounting to P967.95 million.

The cement firm opened at P16 and hit as high as P16.12 but some investors pocketed gains. Based on yesterday’s closing, the cement firm had a market capitalization of P75 billion.

On the other hand, the main-share Philippine Stock Exchange index added 18.54 points or 0.24 percent to close at 7,886.03.

The offering was oversubscribed by over three times the base offer, Eagle chief executive officer John Paul Ang said in a press briefing after the company’s listing on the Philippine Stock Exchange.

Eagle chair Ramon S. Ang said the cement company was facing a “very good future.” In two to three years, he said the company was hoping to boost its market share to 25 percent from 14 percent at present, by then making it the largest cement company in the country.

By next year, the elder Ang said Eagle should already be number one in terms of capacity. “If we’re able to sell seven million (tons), Eagle will be number one right away,” Ang said.

“Filipino businesses can derive inspiration from Eagle Cement’s story. I believe there are local corporations that are ready to expand operations or offer more products to the market. This market debut shows that tapping the stock market is a viable financing option for growth and expansion. We have seen family businesses open their doors to the public through the years. And it’s encouraging to see Ramon and Paul bring Eagle Cement together to the next phase of its life as a listed company,” PSE chair Jose Pardo said in his welcome remarks during the listing ceremony.

“Eagle is poised to benefit from the Philippines’ growing construction industry due to the country’s GDP (gross domestic product) growth and the government’s plan to boost infrastructure spending in the following years,” said online stock brokerage COL Financial.

At present, Eagle is the fourth largest cement producer in the country in terms of capacity. The three bigger players are all multinational firms: Holcim/La Farge (6.88 million tons); Republic Cement (6.77 million tons) and Cemex (4.68 million tons).

Eagle has a production capacity of 5.1 million tons a year, or a total of 130 million 40-kilo bags of cement. It is presently completing its third production line in Bulacan which will raise its production capacity to 7.1 million metric tons per annum by 2018.

IPO proceeds will be used to partially finance the construction of a two-million metric ton cement plant in Cebu, which will become its fourth production line. The Cebu plant is set to raise Eagle’s production capacity to 9.1 million metric tons per annum by 2020.

Eagle sold 500 million primary common shares with an over-allotment option of up to 75 million secondary shares. It listed on the main board of the PSE on Monday under the ticker symbol “EAGLE”.

China Bank Capital Corp., PNB Capital and Investment Corp. and SB Capital Investment Corp. acted as the joint issue managers, joint lead underwriters and joint bookrunners for this equity offering.