Alternergy, Philippines' first IPO this year, debuts flat as rate hike woes linger

MANILA, Philippines — Alternergy Holdings Corp.’s debut in the local bourse fell flat as rate hikes cloud investor sentiment.

The renewable energy firm finished trading on Friday unchanged from its offer price of P1.28 per share apiece. The lukewarm welcome came a day after the Bangko Sentral ng Pilipinas ramped up its inflation attack, pumping 25 basis points into the policy rate, which dragged down market sentiment.

Alternergy is a renewable energy holding company with a portfolio of investee companies with wind, solar, hydro, floating solar, and battery storage power projects.

The company’s debut, listed as ALTER in the ticker, marked the country's first IPO in 2023. The IPO covers the sale of up to 1.15 billion primary common shares. Including the overallotment option of 115 million shares, the company raised up to P1.62 billion in net proceeds.

Hernan Segovia, trader at Summit Securities, explained why investors gave Alternergy a cold welcome.

“Currently there’s no huge appetite as IPO sentiment is almost at nil right now. Lots of retail investors were still stuck on previous IPO listings,” he said.

Investors everywhere dealt with a flurry of gloomy headlines in past months already, ranging from financial crisis contagion fears and persistent headwinds buffeting global equities. Even then, some experts expected in January that the global economic outlook, expected to slow down this year, could keep trading conditions “tough.” 

Commenting on the prevailing trading environment, there is optimism to be had as Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp., sees it. 

“I think the general market sentiment is that we are reaching the peak of inflation soon as well as rate hikes,” he said in a Viber message. 

Enriquez pointed out that retail investors eyed bank time deposits, owing to the potential of attractive yields.

“No need to take on additional equity risk at this point,” Enriquez added. 

The company plans to use the money to be raised from the IPO for the development and construction of projects under development, debt payment for the acquisition of Kirahon Solar Energy Corp., pre-development expenses for projects in the pipeline, and general corporate requirements.