Filinvest Development Corporation or FDC in the Philippine Stock Exchange broke its silence yesterday when it rose by 10.71%. It actually erupted out of an inverted head and shoulders continuation pattern (see chart) and even gapped up in yesterday’s trading. With volume to support the move, I’d say that FDC could sustain its journey higher. So judging by the height of the pattern, it could at least rise by another PHP 1.00 to PHP 6.50. That’s about 10.36% upside from yesterday’s closing of PHP 5.89.
Fundamentally, Filinvest Development Corp. will hold a follow-offering to finance its expansion plans and to abide by required public float of at least 10%. Presently, FDC’s public ownership only amounts to 6%. With its plan to raise up to 2.5% billion more shares, public ownership would increase to around 29.5%. While an increase in public does not necessarily reflect positively in the company, the additional funds would allow the company to develop its real estate and hospitality business, support its investments in utilities and infrastructure, and to settle some of its credit obligation.