MerryMart stocks soar in frenzied market debut

MANILA, Philippines — Grocery operator MerryMart Consumer Corp. made a blockbuster debut at the Philippine Stock Exchange on Monday, evidence of robust investor appetite for companies considered as essential businesses against the backdrop of coronavirus pandemic.

The company is the first to do an initial public offering (IPO) in 2020 after fears over the economic damage caused by the virus triggered a massive sell-off around the world and sent the local stock market to record lows earlier this year. 

The market turmoil prompted many firms to abandon their IPO plans, but not MerryMart. On Monday, shares in the company of businessman Edgar “Injap” Sia II hit the ceiling price and soared 50% to close at P1.50 apiece, higher than the offer price of P1 each. 

MerryMart's stellar performance bucked the downturn in the main index, which fell 4.82% to finish at 6,163.82 amid growing concerns over a second wave of infections as the US and China report new cases of the highly contagious virus.

"Some people may ask, 'Why continue to conduct an IPO in the middle of this pandemic?' Well if you really analyze, many of the most successful businesses around the world was either started during a crisis or has deepened its market grip during the crisis period," Sia said in a statement.

"This is such a rare window for the company to compete well and a rare chance for a new player to quickly grow in a shorter span of time than during good times," he added.

Although the market is not in good shape at the moment, analysts believe MerryMart will perform well as retail companies continue to benefit from Filipinos stocking up supplies to avoid going out due to contagion fears.

Since grocery stores and supermarkets are considered essential businesses, any coronavirus-induced disruptions in their operations were limited.

According to MerryMart, proceeds from the IPO will be used by to expand its outlets. The company plans to open 12 additional stores by the second quarter and is targeting to have 1,200 branches nationwide by 2030.