Investors await Eagle Cement listing

MANILA, Philippines - Investors are shying away from listed cement companies with foreign funds, dumping shares ahead of the planned market debut of Eagle Cement Corp.

Traders said investors are keenly awaiting the listing of the Ang family’s cement company, which they may find more attractive.

“I’d be more comfortable with Eagle Cement because they are not paying royalties,” said Joseph Roxas, president of Eagle Equities Inc.

At the same time, he noted that the decline in the share prices of Cemex Holdings Philippines and Holcim Cement could also be due to company-specific reasons.

In the case of Cemex, for instance, Roxas said investors were disappointed with its fourth quarter results.

Cemex, which made its market debut last year with a P25.13 billion initial public offering (IPO), has been recording a downtrend in its share price since February after it released its earnings report.

From P11.16 per share on Feb. 10 when it reported its fourth quarter results, the stock closed at P7.03 per share on Friday. Its IPO price was P10.75 per share.

The company reported a pro forma net loss of P7.18 million in the fourth quarter on the back of a 13 percent decline in sales to P5.56 billion during the period.

Full year 2016 profit stood at P1.87 billion as sales grew by a modest two percent to P25.34 billion.

Cemex said there was a notable decrease in cement consumption in the fourth quarter, reflecting lower public infrastructure activity and some restraint in private construction compared to previous quarters.

BPI Capital Corp. managing director and COO Reggie Cariaso said some investors found Cemex’s fourth quarter performance to be disappointing.

“CHP disappointed on its fourth quarter results. It’s tough to say (the same thing) for Holcim Philippines because of low trading volumes,” Cariaso said.

Share prices of Holcim Philippines Inc., the other listed cement company, are likewise on the decline.

Roxas said this may be because of the overall sentiment on the cement industry, which is being affected by lackluster infrastructure spending.

Holcim’s shares closed at P15.10 per share on Friday, down 2.45 percent. At the start of the month, its share price was at P17.18 per share.

This even as Holcim Philippines reported a 7.5 percent growth in revenues last year to P40.3 billion.

Its net income reached P6.8 billion compared with 2015’s P8.1 billion, which benefited from a one-time gain of P2.6 billion from the revaluation of Holcim Philippines’ investment in an affiliate.

Without the one-off item in 2015, Holcim’s profits were higher by 24 percent in 2016 on effective management of manufacturing costs even as the company raised its cement production capacity, it said.

Fourth quarter figures were not immediately available.

An investment banker from a local investment house said foreign funds are the ones mostly selling shares in the cement companies but it was difficult to say if it was related to the planned offering of Eagle Cement.

“Investors can be present in many companies in the same sector but definitely, there is interest in Eagle,” he said.