June 29, 2018 / 5:04 AM / 22 days ago

UPDATE 1-Philippines' D.M. Wenceslao shares slide 20 pct on market debut

* First Philippine IPO this year

* Shares plunge on bearish market conditions

* Property sector weighed down by higher interest rates (Adds details, analyst and company comments, background)

By Neil Jerome Morales

MANILA, June 29 (Reuters) - Philippines’ D.M. Wenceslao and Associates Inc made a lacklustre trading debut, with its shares plummeting as much as 19.5 percent versus the offer price, in the country’s first initial public offering (IPO) this year.

The shares dropped to as low as 9.66 pesos after opening at 11.80 pesos apiece, from the IPO price of 12 pesos, after the real estate developer and construction firm raised 8.15 billion pesos ($152.6 million) from the IPO.

“The timing was not really that right. The market is in a bear territory and there are risks both domestic and external,” said Justino Calaycay, head of research at brokerage firm Philstocks Financial Inc in Manila.

D.M. Wenceslao, valued at $762.9 million, listed its shares at a time when the stock market is weighed down by U.S.-driven trade tensions and worries over the weakening peso and rising inflation.

The Philippines’ benchmark index has lost about 16.6 percent year-to-date, making it Southeast Asia’s worst performer.

D.M. Wenceslao priced the IPO, the first in 10 months in Manila, at the bottom of the indicative range given volatile market conditions, and after Del Monte Philippines Inc postponed its own offering.

Proceeds from the offering will fund the construction of commercial and residential projects in Aseana City, home to Manila’s smaller version of the Las Vegas gaming strip.

“These pipeline projects will continue to increase our recurring revenue streams and sustain our long-term growth,” company President Delfin Angelo Wenceslao said in a statement.

The outlook for the Philippine property sector remains upbeat, buoyed by strong demand for office and residential spaces.

But shares of property firms are dragged by the sector’s sensitivity to higher interest rates, Philstocks’ Calaycay said.

The Philippine central bank on June 20 raised interest rates for the second time in six weeks, saying it was ready to take further action to tame inflation and volatility in the peso. ($1 = 53.4130 Philippine pesos) (Reporting by Neil Jerome Morales; Editing by Gopakumar Warrier)

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