Travellers International’s long-awaited IPO on the Philippine stock market turned out flat after shares in the company barely registered a blip in its debut at the stock market today.
Travellers’ stock opened at Php11.38 per share before climbing to as high as Php11.46 per share early in the trading day. Unfortunately, that price ended up being the high mark for the day as the price settled at Php11.26 per share, 0.18 percent lower than its initial listing price of Php11.28 per share.
The company was still about to hit its target of raising $470 million from its IPO, but it was still disappointing to see the shares not do as well as it had hoped.
“I think Travellers listed on a day that appetite for the market was weak,” Jose Vistan of AB Capital Securities Inc told Interaksyon.com.
“There’s nothing inherently wrong with the company.”
Nevertheless, the proceeds are there and the company has made it known that the amount generated will be used on general corporate purposes, including financing capital and project expenditures as well as equipment leases and purchases. Among the more pertinent items to check off of Travellers’ financing list include the building of two new hotels – the Hilton Manila and the Sheraton Hotel Manila – and the expansion of the existing Maxims Hotel. Once all these developments are completed by 2016, the entire expansion plan is expected to add 913 more hotel rooms to add to the 1,226 rooms that are currently being offered.
The rationale, according to president Kingson Sian, was to drive up casino revenues and with more hotel rooms available, more gaming machines could be offered, thus increasing the potential for the casino operator to generate increased revenue for Resorts World Manila.
Travellers initially planned to make a second offering to the market, but those plans were scuttled because the company feared that market conditions weren’t conducive to support that huge of a business leap. in the end, Travellers opted to hold back on that second offering and judging by the way the IPO performed in its debut on the Philippine stock market, that decision ended up being the smart and prudent one.
