CTS Global plans P1.38-B initial public offering

CTS GLOBAL Equity Group, Inc. is planning a P1.375-billion initial public offering (IPO) by February next year, mainly to use proceeds for the growth of its trading operations.

“The main reason for the company’s IPO is to scale its global trading,” CTS Global said in its preliminary prospectus dated Dec. 3.

“For the past few years, the company has consistently generated profits from its assets under management but was not able to maximize its bottomline profit due to overhead expenses,” it added.

The Philippine-based global trading firm is planning to offer up to 1.375 billion primary common shares for up to P1 each.

CTS Global, formerly Citisecurities, Inc., engages in trading in the local bourse as well as in the stock markets of the United States, Hong Kong, and Japan. Its current 30 individual traders manage a total capital of P550 million.

“For the past decade, the Company maintained its capital stock at P200 million, only raising it to P500 million in the last quarter of 2019 and an additional P50 million in 2020,” CTS Global said.

Its traders’ technique falls under the rules of the FTSR Trading Framework, which comprises Fundamentals Analysis, Technical Analysis, Sentiment, and Risk Management.

The company will continue to employ its existing strategy to scale traders’ accounts, however, expenses will remain the same. It said this will lead to a “promising opportunity for its operating leverage.”

“A further increase in capital to be deployed in the global markets is the key to CTS Global taking it to the next level,” the company said.

Apart from using P1.235 billion to scale global trading operations, the company plans to use net proceeds from the IPO to expand its client accounts management segment and for general corporate purposes.

CTS Global will be using P20 million to hire more talent as it builds its client accounts management segment. Meanwhile, P100 million “will be used for any adjustments needed going forward, depending on the country’s pandemic recovery.”

“This may be in the form of developing the company-owned office space to the extent necessary or further improvements in the digital systems for the work-from-home arrangement,” CTS Global said.

It is looking to conduct its offer period from Feb. 21 to 28.

CTS Global plans to list on the small, medium, and emerging  board of the Philippine Stock Exchange by March 9 under the trading symbol “CTS.”

The company tapped SB Capital Investment Corp. as the issue manager, underwriter, and bookrunner of the offer. — Keren Concepcion G. Valmonte