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Stock Commentary

Alternergy’s IPO is today

Merkado Barkada
Alternergyâs IPO is today
That said, this is the first IPO of the year, so I’m going to be sitting there in my pajamas, bowl of popcorn in-hand, ready to take in the festivities!
Merkado Barkada

Alternergy [ALTER 1.28] will begin trading this morning after what was a pretty quiet offer period.

Analysis of the MB ALTER IPO Allocation Poll shows that Barkadans requested ?10.9 million in ALTER IPO stock, and received P10.5 million in allocations from brokers and the PSE EASy platform, which is an allocation rate of 96%.

As usual, the majority of the fractional allocations came from COL Financial [COL 3.06 2.0%] customers, which had a brokerage-low allocation rate of just 60%.

The second highest number of fractional allocations came from AAA Equities, with an allocation rate of 61%.

The majority of other brokers all achieved either 100% allocation rates  or near-100% allocation rates for prospective IPO buyers. Barkadans that used PSE EASy to request allocations received over 96% of their requested amount.

MB BOTTOM-LINE

The overall profile of this Allocation Poll result resembles what I saw from PREIT [PREIT 5.28], both in terms of overall interest, and how easy it was for buyers to get as much of the IPO as they wanted.

Some Barkadans reported receiving fractional allocations from PSE EASy, but the reported zero allocation and the one other fractional allocation don’t align with how the PSE has said that it allocates PSE EASy allocations using the “waterfall method”, so I’m hesitant to count those as real fractional allocations.

My feeling is that the PSE EASy tranche was not oversubscribed, and that only some brokers had enough demand to be forced into a fractional allocation situation.

We won’t know about the institutional interest until a little bit later (the PSE cracked down on deal insiders talking about institutional take-up before the IPO), so it’s hard to say if there’s a swell of pent-up demand begging to get into this deal at the opening bell, and if so, the depth/breadth of that potential swell.

Keep in mind, though, that this is only an informal poll of the 10,000 email subscribers and 30,000 to 50,000 daily readers of Merkado Barkada, and those that responded might not be a representative sample that we could use as a foundation for accurate analysis.

If you are planning to trade the ALTER IPO, just know that there is a stabilization fund, so there is some downside risk protection, but that the presence of a stabilization fund doesn’t guarantee that the price won’t drop.

If you’re buying for the short term, know your goals and your risk tolerance before you hit the buy button. Set your stops.

That said, this is the first IPO of the year, so I’m going to be sitting there in my pajamas, bowl of popcorn in-hand, ready to take in the festivities!

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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.

ALTERNERGY

IPO

PHILIPPINE STOCK EXCHANGE

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