Displaying items by tag: stocks

Eagle rises on debut, preys on top prize

 

Shares of Eagle Cement Corp., which aims to be the country’s leading cement producer in the next few years, outperformed the stock barometer on inaugural trading yesterday.

Eagle gained P0.30 or 2 percent to close at P15.30 per share from its initial public offering price of P15 per share. It was the most actively traded company, with total traded value reaching P967.95 million.

The cement firm opened at P16 and hit a high of P16.12, but gave up earlier gains as some investors pocketed gains. Based on yesterday’s closing, the firm had a market capitalization of P75 billion.

On the other hand, the main-share Philippine Stock Exchange index added 18.54 points or 0.24 percent to close at 7,886.03.

Eagle’s offering was oversubscribed by over three times the base offer, its president John Paul Ang said in a press briefing after the company’s listing on the Philippine Stock Exchange (PSE).

Eagle chair Ramon S. Ang said the cement company was facing a “very good future.” In two to three years, the company hopes to boost its market share to 25 percent from 14 percent at present, making it the largest cement company in the country.

But by next year, the older Ang said Eagle should already be number one in terms of capacity. “If we’re able to sell seven million [tons], Eagle will be number one right away,” he said.

He estimated Eagle’s sales volume could expand by around 25 percent next year.

In his remarks prior to the listing, PSE chair Jose Pardo said: “Filipino businesses can derive inspiration from Eagle Cement’s story. I believe there are local corporations that are ready to expand operations or offer more products to the market. This market debut shows that tapping the stock market is a viable financing option for growth and expansion. We have seen family businesses open their doors to the public through the years.”

Online stock brokerage COL Financial also sees bright prospects for Eagle, saying it was “poised to benefit from the Philippines’ growing construction industry due to the country’s GDP (gross domestic product) growth and the government’s plan to boost infrastructure spending.”

At present, Eagle is the fourth largest cement producer in the country in terms of capacity. The three bigger players are all multinational firms.

The local firm has a production capacity of 5.1 million tons a year, or a total of 130 million 40-kilo bags of cement. It is already completing its third production line in Bulacan, which will raise production capacity to 7.1 million metric tons per annum by 2018.

IPO proceeds will be used to partially finance the construction of a two-million metric ton cement plant in Cebu, which will become its fourth production line. This plant is set to raise production capacity to 9.1 million metric tons per annum by 2020.

“And whenever there’s an opportunity to invest, to acquire anything whether mining rights or existing plant or whatsoever, the company will definitely pursue it,” the older Ang said, adding that acquisition would hasten the company’s growth.

Eagle sold 500 million primary common shares with an over-allotment option of up to 75 million secondary shares. Its ticker symbol is “EAGLE”.

 

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US stocks, dollar tumble as investors rethink 'Trump trade'

NEW YORK - Stocks on major markets and the US dollar sold off while bond yields fell on Wednesday as investors fled risky assets amid uncertainty about US President Donald Trump's ability to deliver on his tax and banking reforms and infrastructure spending.

Reports that Trump asked then-Federal Bureau of Investigation Director James Comey to end a probe into the former national security adviser have raised questions over whether Trump tried to interfere with a federal investigation.

 

US stock market declines accelerated in afternoon trading, and major US indexes ended near session lows. The Dow Jones industrial average fell 372 points, and both the Dow and S&P 500 suffered their worst percentage drops since Sept. 9.

The CBOE Volatility index, the most widely followed barometer of expected near-term stock market volatility, ended above the 15 level in its highest close since April 13. The US dollar index has now erased its post-election gains.

A small but growing number of Trump's fellow Republicans called on Wednesday for an independent probe of possible collusion between his 2016 campaign and Russia.

The news came after a tumultuous week at the White House when Trump unexpectedly fired FBI director Comey and reportedly disclosed classified information to Russia's foreign minister about a planned Islamic State operation.

Optimism over pro-growth economic policies under Trump helped drive a sharp rally in US stocks after the Nov. 8 US election. Even with Wednesday's declines, the S&P 500 stock index is up 10.2 percent since last November's US elections though.

"It's certainly a day when the chickens are coming home to roost," said Donald Selkin, chief market strategist at Newbridge Securities in New York.

"The (equity) bull market is not over by any means, but between the political stuff and the fact that the next earnings season is three months away, there's going to be a lack of motivation."

The Dow Jones Industrial Average was down 372.82 points, or 1.78 percent, to end at 20,606.93, the S&P 500 index lost 43.64 points, or 1.82 percent, to 2,357.03 and the Nasdaq Composite dropped 158.63 points, or 2.57 percent, to 6,011.24.

The Nasdaq had its worst day since June 24. Both the Dow and S&P 500 fell below their 50-day moving averages for the first time since April 21.

While previous threats to Trump's plans have rattled investors, they had failed to cause any significant pull back in stocks. The VIX last week closed at 9.77, its lowest close since December 1993.

Bank stocks, which outperformed in the post-election rally, were the worst hit on Wednesday. The S&P 500 financial sector tumbled 3 percent.

At nearly 18 times forward earnings, the S&P 500 trades at a significant premium to its long-term average valuations of 15 times, according to Thomson Reuters data.

MSCI's gauge of stocks across the globe fell 1.2 percent, while European shares ended down 1.4 percent.

"It's registering with more investors that it's going to be hard to get back on track with the latest allegations," Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Prices of bonds, seen as safe-haven assets, rallied, while yields were on track for their biggest daily percentage drops since July.

Benchmark 10-year notes gained a full point in price to yield 2.22 percent, the lowest since April 21, and down from 2.33 percent late on Tuesday.

The dollar index, which tracks the US currency against six peers and had scaled a 14-year peak of 103.82 on Jan. 3, fell 0.6 percent to its lowest level since Nov. 9, surrendering all of its "Trump bump" gains. The dollar also fell by nearly 2 percent against the yen.

In commodity markets, safe-haven gold hit a two-week high, while oil prices were higher. Spot gold rose for a fifth day and was up 1.8 percent at $1,258.38 an ounce.

Brent crude gained 1.1 percent to settle at $52.21 per barrel, while US light crude rose 0.8 percent to settle at $49.07.

Caroline Valetkevitch, Reuters
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