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Stock Commentary

Premiere Island REIT reported to be “fully subscribed”

Merkado Barkada
Premiere Island REIT reported to be âfully subscribedâ

According to Iris Gonzales of The Philippine Star, she’s heard from sources that Premiere Island REIT [PREIT 1.50 pre-IPO] [link] is “fully subscribed” heading into the last day of the offer period.

The offer itself was split into three trachea, as is normal, with 70% reserved for institutional investors (whales and state-owned buyers), 20% for sale through brokers to retail investors, and 10% for “local small investors” to buy through the PSE EASy platform.

The sources in the article claimed that all of the institutional and broker shares were sold, but we will have to wait to hear about the PSE EASy tranche.

MB BOTTOM LINE

I think it’s important to note the language used here.

“Fully subscribed” is not “oversubscribed”; it’s the bare minimum that an IPO would hope for (to sell all of the shares it put up for sale), as the price of the offer was engineered to make sure all the shares get sold.

To me, the key here is the PSE EASy tranche, as this is the “true” measure (in my opinion) of the retail interest in a stock, and is a pretty good signal of what might happen after the stabilization fund is exhausted or expires.

You might remember back with Medilines Distributors [MEDIC 0.8 2.5%] that it was reported to have been oversubscribed on the institutional tranche (which was also 70% of the offer), but that did not sell well with retail investors in the PSE EASy tranche.

The same is probably likely with VistaREIT [VREIT 1.6], which had a 94% allocation rate according to my poll. 

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

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