June 8, 2018 / 2:19 PM / 6 months ago

Philippine property developer D.M. Wenceslao prices shares at bottom of range

MANILA, June 8 (Reuters) - Philippine property developer D.M. Wenceslao and Associates Inc on Friday priced its initial public offering (IPO) at the bottom of its indicative range in the latest sign of a lack of appetite for share listings in Southeast Asia’s worst-performing stock market.

The IPO, set to raise 8.15 billion pesos ($154.3 million), is the country’s first this year and comes after Del Monte Philippines Inc postponed its own offering that was set to be priced on Wednesday, citing volatile market conditions.

The family-owned real estate developer and construction firm, priced 679.2 million new shares or a 20 percent stake, at 12 pesos, said sources with knowledge of the transaction. That compares with a marketing range of 12-16 pesos each.

Del Monte, a seller of canned fruits and tomato products, had planned to raise 13.5 billion pesos.

“It is not justifiable in our view if the issue is priced beyond 14 pesos per share simply because the well-established peers are currently trading at bargain levels,” Manila-based brokerage firm SB Equities Inc said in a research note on D.M. Wenceslao, describing the 12 pesos offer price as “fair.”

The Philippines’ benchmark index has shed about 10 percent this year, dragged down by worries about the impact of a weak currency and high domestic inflation on the economy.

The Philippine peso, which is one of Asia’s worst-performing currencies, is down 5.5 percent against the dollar this year.

D.M Wenceslao is the master developer of Aseana City in the Manila Bay area, home to the country’s newest gambling hubs called the Entertainment City, Manila’s smaller version of the Las Vegas gaming strip.

In 2015 the company shelved a planned 11 billion pesos IPO due to unfavourable market conditions.

D.M. Wenceslao, which is valued at $772.1 million, is set to list on the Philippine Stock Exchange on June 29 following the retail offer from June 18 to 22.

It plans to use the IPO proceeds to fund projects, obtain land assets and develop infrastructure in Aseana City. ($1 = 52.8130 Philippine pesos) (Reporting by Enrico dela Cruz and Neil Jerome Morales; Editing by Anshuman Daga and Elaine Hardcastle)

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