Makati Finance makes successful debut at PSE

The first stock market listing for the year took off on a good start, with shares of Makati Finance Corp. (MFIN) gaining 8.7 percent on its debut yesterday, the Philippine Stock Exchange (PSE) said.

From an initial public offering price of P1.38 each, MFIN shares closed 12 centavos or 8.7 percent higher at P1.50, one of the top five gainers among the traded stocks yesterday.

The issue’s performance was in consonance with the overall trend of the market, with the main index climbing another 3.57 points to 1,015.07.

MFIN is the 237th company in the PSE’s roster of stocks and only the second issue to list at the Small and Medium Enterprise (SME) board. Its market capitalization, though, amounts to only P103 million, a mere fraction of the total P2.3 trillion capital base of the PSE.

However, only 40,000 MFIN shares changed hands in a lean trading session with Abacus Securities – the sister firm of the issue manager and underwriter Abacus Capital & Investment Corp. – buying all the shares from selling firm Asian Capital Equities.

PSE chairperson Vivian Yuchengco said MFIN’s listing is expected to signal the resurgence of the entire stock market which has been in the doldrums for the past two years.

The local financing firm, one of the country’s most profitable, generated about P23.4 million in net proceeds from the float of 19.56 million of its primary common shares, which opened up 26 percent of its outstanding capital stock to the public.

The proceeds will be used to finance its lending activities and the retirement of its notes payable.

As a credit institution, MFC provides its clients with real estate, appliance and fleet car financing but its main focus at the moment is lending to medical professionals. The main product of the company, Rx Cashline, accounted for approximately 90 percent of its total net loan receivables in 2001, making MFC a "first mover" in this particular market niche.

MFC also markets business loans to SMEs, although these loans account for less than 10 percent of its current loan portfolio. Through factoring, the company is able to provide liquidity to SMEs by purchasing their trade receivables.