A whopping $3.3 billion chased $1 billion of shares that were on offer in the twin island state of Trinidad and Tobago between July and August leading to a massive oversubscription for the 48 million First Citizens Bank shares at a very attractive price of TT$22 each. The high level of oversubscription is bound to result in a massive jump in the stock price after it opens on Monday, September 16 as some of 12,435 applicants who got less shares than they wanted will enter the secondary market to snap up more shares before the price gets too high.
Employees of the bank got 3.78 million units accounting for 7.8 percent of the amount offered and just more than half of what they were entitled to based on the allocation noted in the prospectus. The public got 12,852,807 units or 25.5 percent, which is 10.5 percent more than the prospectus had assigned them. Pensions and other trust funds got 12.1 million units representing 25 percent; mutual funds and unit trusts, 10 million units or 20.7 percent; the National Insurance Fund 10 percent amounting to 4.85 million units and well as companies registered in Trinidad and Tobago and the Caribbean Investment Fund.
The prospectus had indicated that if the Offer is oversubscribed, consistent with the Government’s policy of promoting the widest possible participation in share ownership, priority to receive the allocation (as a percentage of the maximum Offer) shall be given as follows in descending order of priority:
- Employees of the Issuer 15%
- Individual investors who are nationals of Trinidad & Tobago 15%
- Registered pension and other trust funds, Credit Unions and Cooperatives 25%
- Registered mutual funds including The Trinidad & Tobago Unit Trust Corporation 25%
- National Insurance Board 10%
- Companies registered in Trinidad and Tobago and other investors such as the Commonwealth Development Corporation and the Caribbean Investment Fund 10%.
The stock went on the market at a PE of 14.67, which is well below BNSTT at 22.6, BCB Holdings of 25.78 and Ansa Merchant Bank at 19.30 but just below Republic Bank at 15. Heavy oversubscription usually mean that the price will rise sharply as investors try to get more shares to satisfy their thirst.
IC Insider has labelled the stock, Buy Rated and this remains intact.
Related posts | T&T Citizens Bank IPO oversubscribed | First Citizens’ $1B IPO opens today | First Citizens lousy investor’s relations | Buy Rated stock list grows
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