1st IPO of 2013: Philippine Business Bank seeks to raise P3.2B
MANILA - Philippine Business Bank,a midsize savings bank, expects to raise P3.2 billion ($79 million) through an initial public offering this month, underwriters have said, in the country's first new listing this year after a robust 2012.
The lender's IPO follows a boom in new listings in Southeast Asian countries like Malaysia, the Philippines and Thailand in 2012 that helped investment banks weather a plunge in bigger Asia-Pacific markets, including China, Hong Kong and Singapore.
In the Philippines last year, companies raised a record of about P220 billion ($5.4 billion) from five IPOs and several follow-on offerings, and another buoyant year is expected on listings of companies like SMC Global Power, a unit of San Miguel Corp.
The final offer price for Philippine Business Bank's IPO was set at P31.50 per share following the bookbuilding process, joint lead underwriters and bookrunners First Metro Investment Corp and SB Capital Investment Corp said in a letter to the stock exchange dated Feb. 1.
That was 25 percent lower than the tentative maximum price of P41.94 announced earlier. There was no indicative range for the offer.
"I think the issue regarding PBB is that it's too small for institutional clients. It's really for retail investors," said an analyst at a brokerage firm, who asked not to be identified because he was not authorized to speak to the news media.
"Normally if it would be a midsized or big offering with a low price, then it would be an indication that demand is weak."
Philippine Business Bank, which caters mainly to small- and medium-sized enterprises, said it would use the proceeds to increase lending and invest in securities. The listing is scheduled for Feb. 19.
The bank - owned by Filipino businessman Alfredo Yao, who also owns juice maker Zest-O Corp and budget airline Zest Air - had a net profit of P624 million ($15.4 million) for the first nine months of 2012, up 14 percent from a year earlier.
From IPOs alone, companies in the Philippines raised $787.5 million last year, the most since 2007, helped by GT Capital Holdings Inc's $500 million deal, which was the country's second-biggest IPO ever, Thomson Reuters data shows.
In 2013, the Philippine Stock Exchange hopes that fundraising from both IPOs and follow-on offerings will match the record set last year, helped by the introduction of new products such as exchange-traded funds, said Hans Sicat, the president of the bourse. The exchange is awaiting approval from the securities regulator of proposed rules for ETF trading.
The local stock market gained 33 percent last year, the second best-performing index in Asia after Thailand's, lifted by optimism about the Philippine economy - the fastest growing in Southeast Asia. The main index is up about 9 percent so far this year.
Among notable companies that plan to go public this year is SMC Global Power, the power generation unit of San Miguel. SMC Global, the country's biggest power producer, had initially planned to raise as much as $850 million through an IPO in 2011. But it delayed that listing, citing unfavorable market conditions.
Companies that might conduct follow-on offerings this year include another San Miguel unit, San Miguel Brewery Inc , which has until June 30 to sell shares to meet a 10 percent minimum public float rule and avoid delisting from the local exchange.