Axelum share price down on 1st trading day
Axelum Resources Corp., a coconut products manufacturer that was the first major initial public offering (IPO) this year, saw a sharp drop in its share price during its trading debut on Monday.
Shares of the 33-year-old business lost 6.2 percent to P4.69 each by the closing bell. It lost as much as 16.2 percent earlier in the session. Monday marked Axelum’s first day of trading after the company raised P4 billion from local investors on Sept. 24-29.
Axelum is among a host of IPOs seeking to test investors’ appetite despite a turbulent period for the global capital markets.
Brokers and traders interviewed by the Inquirer said the decline on Monday came amid the general weak sentiments in the stock market on top of emerging bargain options for investors after the benchmark Philippine Stock Exchange index lost over 8 percent from its recent peak in July.
“There are lot of cheaper alternatives and these are the blue chips,” Joseph Roxas, president of stock brokerage firm Eagle Equities Inc., said in an interview on Monday.
Roxas said some Axelum investors who were hoping for a first day pop quickly shifted gears when this did not materialize. Axelum opened higher by 6 percent to P5.3 per share—versus its P5 per share IPO price—before falling on selling pressure.
“It’s a good company but it’s also the prevailing market sentiments and the type of investors that came in,” he added.
From its main production facility in Medina, Misamis Oriental, Axelum makes a wide range of coconut products from desiccated coconut, used by bakeries around the world, to coconut juice and oil.
It supplies companies such as Vita Coco, The Hershey Co., Nestle, Unilever, Ferrero, General Mills, Campbell’s, Quaker, and Kellogg’s.
Axelum said 25 percent of the IPO proceeds would be used for acquisitions while another 25 percent would be for debt payments. It said 16 percent would be set aside for domestic and international distribution; 15 percent for the improvement of its facilities and 19 percent for other spending requirements.
The company’s sales last year hit P5.88 billion, higher by 2.5 percent from 2017. It posted a profit of P364.82 million last year, down 31 percent.
Axelum said its prospects moving forward remained bright. In a statement on Monday, it announced a deal to supply organic coconut milk powder to be used as ingredient in a skin care product/supplement.
Eyes are now on upcoming IPOs, some with much larger valuations.
On Thursday, billionaire Manuel Villar Jr.’s AllHome Corp., a P14.9-billion IPO, will make its trading debut on the PSE. Also on tap this year are planned initial listings by Cal-Comp Technology (Philippines) Inc. (P10.7 billion), Fruitas Holdings Inc. (P1.2 billion) and Metro Pacific Hospitals Holdings Inc. (P83 billion).
In August, Kepwealth Property Phils, Inc. raised P384.7 million and listed on the PSE’s Small, Medium, and Emerging Board.
