Robinsons Retail Holdings Inc. the biggest Philippine initial public offering, is giving investors an opportunity to bet on Southeast Asia’s fastest-growing economy at a 12 percent valuation discount to its most powerful rival. The operator of supermarkets and department stores controlled by Philippine billionaire John Gokongwei will begin exchanging in Manila today after bolstering at least $621 million. The IPO financial value of 58 pesos per share values the firm at 22 times calculated 2014 earnings, said Bach Johann Sebastian, a senior vice president at Robinsons. Puregold Price Club Inc., the nation’s largest listed retailer, exchanges at 25 times the average of analysts’ profits forecast recorded by Bloomberg. Fund Inflows Philippine financial markets are set to open today after Super Typhoon Haiyan struck the central Philippines, leaving a death toll that the Associated Press reported may reach 10,000. The storm destroyed an airport, cut power and phones lines, and flattened crops. Rally Bets The country’s gross domestic product, which increased 7.5 percent in the second quarter, will probably expand 7 percent during the whole of 2013 and 6 percent next year, among the five-fastest projected growth rates of 65 economies tracked by Bloomberg worldwide. Puregold Skyrockets The company, which started as department-store operator more than 30 years ago, plans to operate 1,400 shops by the end of next year as it expands beyond Manila, Zapata said. Robinsons had 940 stores, from DIY shops to drugstores, at the end of June, according to its IPO prospectus. Fed Risk The Philippine stock gauge has lost 14 percent since May 22, when Fed Chairman Ben S. Bernanke signaled the central bank’s bond-buying program could be trimmed if the U.S. economy showed a sustained recovery. Puregold has slipped 3.2 percent from its Oct. 18 peak. Robinsons’ sales of durable consumer goods, including electronics and apparel, make it more attractive than Puregold for some investors, said Jomar Lacson, an analyst at Campos Lanuza & Co. in Manila. “Those who want to bet on the growth and changing spending pattern caused by rising income will add Robinsons to their holdings,” Lacson said. “Puregold doesn’t give a full Philippine retail experience. It’s not exposed to spending on consumer durables.” Discretionary purchases may double to 30 percent of household spending from 15 percent in as little as five years if the economy sustains growth near current levels, according to Alex Pomento, a strategist at Macquarie Group Ltd. in Manila. “With the expected shift in consumer spending patterns, this segment becomes attractive,” Pomento said. “At the end of the day, Robinsons is a good proxy to consumption. With a discounted valuation to Puregold, the stock’s bias should be upwards.”
