Manila, Philippines

Cemex Philippines IPO

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I rarely subscribe to IPO issues because I find them too exciting and unpredictable for my taste. Even Mangun mentioned his previous observations on IPOs. Or maybe because I don’t usually get allocations from my online broker anyway. A colleague suggested that I open another account, this time with non-online based brokers to boost my chances of getting IPO allocations. But I haven’t processed the documentations.


I tried subscribing again for Cemex (PSE: CHP) via online broker, as I completely ignored the previous one, Villar’s Golden Haven (PSE: HVN). Was not expecting get allocations on CHP, so I was actually surprised that my whole subscription bid was fulfilled. I was actually expecting a raffle due to oversubscription, but no. Which worries me.
Numbers crunching?
I don’t really do that nowadays since there are many reviews out there anyway on IPOs. And even the gurus and SMEs (subject matter experts) don’t always agree whether an IPO is undervalued or overvalued. So I just read them and make a judgment call, or rather a gut-feel. One will really never know until listing date and days after.
What we know is that Cemex, is the company behind Rizal and Apo cement brands. Some articles say they’re the biggest player in Visayas, and probably has a big share in Mindanao as well, but not much for Luzon. Anyway analysts are pointing down south as the next areas for development given that our new President is from Mindanao. Company is basically a construction play, PPPs, etc. Growth-wise, company prospects seem sustainable.
Proceeds-wise, all of the IPO funds (which is gigantic by the way in PSE terms, among the biggest in recent history) will go to debt repayments, not locally, but to parent companies outside the country. That’s what worries other market players, that the funds will not even be used to further grow the local company. But some argue that once the debt has been repaid, the company can then focus on growing the company using its own funds.
Oversubscribed, they say
Press releases, articles say that institutional funds actually swarmed to get CHP shares. Oversubscribed they say. But as for retail investors, reception seems lukewarm. The COL banner to subscribe did not even say oversubscribed up to the last day. Whereas for other hotter IPOs, give the banner one to two days and it will already say oversubscribed.
Maybe retail investors are wary, because when big funds start dumping the shares that they have (not saying they will, but if ever), it’s usually the poor retail investors who are at the receiving end. Ipit. I hope not this time. Or maybe they were not really interested. I did not feel much hype in stock forums either.
We’ll see. I got a handful so better hope for the best. Listing date is July 18th, next week. I’ll put this on my short-term fund, which is open to more risks and volatility.
Photos from Cemex website.
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2 Responses

  1. Geri says:

    Usually the lock-in period is for those initiating the IPO like the major investors and owners of the company. This is to protect the public from IPO who just want to get out of a troubled company. Assuming you're a retail public investor, then you may sell at day 1, which is today. Goodluck!

  2. Jayson de guzman says:

    Hi. I also subscribed with Cemex but if you read the listing it said there's a lockup period of 365 days. I guess that means we cant sell our shares right away. Right?

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