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Cebu Landmasters closes up 3.2% on PSE debut

June 5, 2017

From Business World

CEBU Landmasters, Inc. closed up 3.2% on its first day of trading on the Philippine Stock Exchange (PSE) Friday, after having risen 4% at the start of trading, with the company holding a positive view on the prospects for the real estate sector in the Visayas and Mindanao (VisMin) under the current government.

Now trading under the ticker CLI, the developer listed at P5, rising 4% at the start of trading to an intraday high of P5.39 before closing at P5.16%.

The company sold 505 million shares including its over-allotment option of 75 million shares, raising a total of P2.9 billion.

The offer was two times oversubscribed, BDO Capital and Investments Corp. President Eduardo V. Francisco said after the listing ceremony at PSE Plaza in Makati. BPO Capital served as the offer’s lead underwriter along with BPI Capital Corp.

“In terms of the geographic distribution, because their strength is in the VisMin, a lot of the investors are coming from there,” Mr. Francisco added.

The company, founded by Jose R. Soberano III in 2003, plans to continue developing projects in the VisMin region in the future, given President Rodrigo R. Duterte’s intention of shifting the development focus away from Metro Manila.

“That’s why we want to remain in VisMin with this administration now. We hear a lot of infrastructure being gearing up (for construction) there… These are very positive developments,” Mr. Soberano said.

CLI’s developments range from affordable, mid-income to high-end offerings. The company’s residential offerings comprise the bulk of its revenue at 80%, with mixed-use projects contributing 20%.

CLI will be using the net proceeds from the offer to finance land acquisitions, with the land bank currently at 60 hectares. The company plans to focus on seven markets — Cebu, Bohol, Bacolod, Dumaguete, Iloilo, Davao, and Cagayan de Oro.

“Those are the most progressive and most ripe in our market scanning,” CLI Chief Operating Officer Jose Franco B. Soberano said.

This year, CLI will be launching seven or eight more projects. The company is also part of a consortium along with three other companies for a reclamation project in Cebu for a 100-hectare site. The other companies are mostly Cebu-based, with one from Cagayan de Oro.

“We’re just waiting for the ECC (environmental compliance certificate) to be granted, then we’ll come up with the bidding process (to contractors),” Mr. Soberano said.

Once the ECC is obtained, Mr. Soberano said the bidding process will follow “very fast.”

“We all know that we have run out of industrial space in the Mactan Export Processing Zone and there are a lot of foreign locators still looking for this and this is a good opportunity for us,” the executive added.

CLI’s listing comes amid the attack on Resorts World Manila in Pasay City that has resulted in the death of at least 34 people, according to reports.

“Other investors sold down gaming stocks in relation to the shooting incident last night,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

“This morning the market was down, now it’s up already. If it was really that bad, the price today would be below the IPO price. So the fact that it’s up, although it may still change by 3:30, it shows you that isolated yung sa Resorts World,” BDO Capital’s Mr. Francisco said.

“According to reports it was two times oversubscribed hence those who didn’t get in probably bought in the market… Outlook seems positive,” Mr. Limlingan said.

Abacus Securities Head of Research Raymond Neil S. Franco said clients took into account the company’s potential for growth before subscribing for the shares.

“We do have a lot of clients who subscribed because of its relatively low valuation and potential for growth,” Mr. Franco said.