KPPI sizzles on backdoor listing talk

Shares of property leasing and management firm Kepwealth Property Phils. Inc. (KPPI)—the first company to list on the stock exchange this year—sizzled on Monday on speculation that it could be a backdoor-listing vehicle for a popular local lodging chain.

Shares of KPPI surged by 41.99 percent to close at P8.15 a share on its first trading day on the Philippine Stock Exchange on Monday. It was the eighth most actively traded company with about P226.95 million worth of shares that traded hands on its stock market debut.

KPPI sold 67.032 million shares at P5.74 a share, raising P384.8 million and earning its ticket to the PSE’s Small Medium and Emerging (SME) board.

At P5.74 a share, KPPI’s stock debut was priced at the “high side” and was valued at almost 25 times projected earnings, close to the valuation of bigger developers like Ayala Land Inc. Yet, the company’s share price surged on listing day, hitting as high as P8.49 before closing at P8.15 a share, which gave it a market capitalization of P1.15 billion.

Dealers said there was speculation that because the company was owned by the same group that owned the Sogo motel chain, a backdoor listing might happen in the future.

Joseph Roxas, president of local stock brokerage Eagle Equities Inc., said such a backdoor-listing might be difficult because as the company listed on the SME board, existing restrictions would prevent the company from changing its article for a seven-year period.