Shares of East West Bank sizzled on its stock trading debut on Monday, defying the downturn across regional markets, as investors bet on the Gotianun-led bank’s growth prospects.
Shares of East West, which listed on the Philippine Stock Exchange under the ticker “EW,” went up by 6.9 percent to close at P19.78 per share from the initial public offering price of P18.50 per share.
The bank, which ended up with P20.87 billion in market capitalization, was the most actively traded company in the local bourse for the day, accounting for P799 million in value turnover. It was the first bank to debut on the PSE in eight years.
In welcoming EW to the Philippine Stock Exchange roster, bourse chairman Jose Pardo noted that the bank’s offering was 240 percent oversubscribed— a “testament to the burgeoning investor appetite” for Philippine equities.
EW sold to the public 245 million shares, raising P5.2 billion from the equity deal, which the bank plans to use for branch expansion and information technology infrastructure.
There was an over-allotment option of 36.8 million shares which had been exercised.
About 70 percent of EW’s shares were gobbled up by institutional investors, including those based overseas, and 30 percent by retail investors, bank president Antonio Moncupa said in a briefing.
As a strategy, Moncupa said the bank favored long-term institutional funds rather than hedge funds in the allocation of stocks to offshore investors.
“Domestic has been more enthusiastic,” Moncupa said, noting that demand from EW’s branches alone stood seven to 10 times larger than the shares available for sale.
Moncupa said EW’s offering was priced in a way that was “generous” on the part of the bank’s parent company, Filinvest Development Corp., to have a “good start with investors.”
“We’d like to think that East West is not a dividend stock. It’s more of a growth stock than an income stock as our balance sheet will dramatically grow,” Moncupa said.
During the listing ceremonies, EW chair Jonathan Gotianun said the bank was “an institution which has set an ambitious growth plan.” Part of this ambition is to grow the bank’s branch network to 350 by 2014 from about 150 at present.
“We are happy that the nation’s fundamentals are positive and conducive for growth and East West Bank will be an active and eager participant in this growth,” Gotianun said. Doris C. Dumlao