Shares of Monde Nissin Corp., the maker of the popular Lucky Me! noodles and SkyFlakes biscuits, failed to soar during the company’s debut on the Philippine Stock Exchange (PSE) on Tuesday.
Monde Nissin shares ended trading at P13.48, or 2 centavos down from its initial public offering (IPO) price of P13.50. It fell to as low as P13.46 and rose to as high as P13.56 per share during the day’s trade.
The company raised P55.89 billion from the sale of primary and secondary shares. It is the biggest IPO in the Philippines so far.
“It closed flat perhaps since many are still awaiting the United States investors to return from Memorial Day weekend to gauge price action,” Luis Limlingan, managing director at Regina Capital Development Corp., said.
“The decline can be attributed to the general market sentiment today. Our local economy is still facing Covid-19 risks. In the government’s latest decision, more areas have been placed under MECQ [modified enhanced community quarantine]. Hopes toward the Bayanihan 3 bill have also been tempered as Malacañang considered it to be non-urgent. These have weighed on the market in general and on Monde Nissin’s shares in particular,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.
The benchmark PSE index retreated 1.06 points to close at 6,627.43 points. Most sub-indices closed lower.
Total value of shares traded reached P14.78 billion with advancers slightly edging out decliners 107 to 101 and 41 shares were unchanged. Foreign investors were net buyers at P341.37 million.
Securities and Exchange Commission Chairman Emilio B. Aquino commended Monde Nissin for its resiliency amid the challenging times.
“This could hopefully help regain the confidence of the investing public in the Philippine stock market as well as stir up our economy considering that majority of its proceeds from the offering will be used for capital expenditures in its operations in the Philippines,” he said.
PSE President and CEO Ramon S. Monzon said over 100 global institutional investors participated in the international book building for the landmark IPO, showcasing how the PSE is able to attract world-class investors and serve as a conduit of large companies in raising capital needed for various purposes.
“The success of this offering is clearly a vote of confidence from institutional and retail investors, foreign and locals alike, in Monde Nissin’s track record spanning four decades, its global reach, strategic direction and leadership. For sure, brand affinity played a major role in retail investors subscribing to this IPO as Monde Nissin’s products are among the staples of Filipinos,” he said.
Some 57 percent of the proceeds will be used to fund the company’s capital expenditures, 29 percent will be used to redeem convertible notes it gave to Arran Investment and the rest will be used for the repayment of loans.
In April 2019, the company issued a convertible note in favor of Arran Investment at an issue price of P9.1 billion. The said note is convertible into common shares of the company representing approximately 6.44 percent of the total issued and outstanding capital stock of the company on a fully-diluted basis.
Image courtesy of Contributed Photo
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