Maynilad closes in the red on first day of trading

Maynilad [MYNLD 14.98 up-0.1%] [link] slipped near its offer price on its stock market debut following an initial public offering that raised P34.3 billion for the largest private water concessionaire in the Philippines.

Shares of MYNLD opened at P15 apiece, matching the IPO price, before closing slightly lower at P14.98.  Even so, the stock outperformed the benchmark index, which fell 1.31% after data showed economic growth slowed to a four-year low of 4% in the third quarter.

Backed by 12 cornerstone investors, MYNLD’s listing was both the country’s largest and final IPO of the year. President and CEO Ramoncito Fernandez said the share sale not only fulfills one of the terms of the company’s amended legislative franchise but also “enables us to pursue our long-term expansion plans.”

MB BOTTOM-LINE:  So far, this IPO is looking as heavy as I thought it would, but it’s only been one day. I don’t have any insight into how hard the stability fund manager had to work to keep the price pinned to P14.98/share, and I didn’t watch the order book on the IPO day, so I don’t have a great grasp on the depth/breadth of the selling pressure. There are always investors who buy an IPO stock during the offer period, hoping for a quick first-day pop, and those people sometimes sell into the stability fund support if that pop fails to materialize.

Maybe with a high-profile IPO like this, there’s a couple of days worth of those sellers, but at some point soon, the paperhands will burn away and the price will begin moving upward, or the selling will shift gears as larger players begin to assess the risk and evaluate using the stability fund (while it still exists) to facilitate their exit. I don’t know which this will be, but I’ll be watching more closely this week to find out.

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