By NEIL HARTNELL Tribune Business Editor THE ARAWAK Cay Port Development (APD) offering has set a Bahamian record by becoming the "most widely subscribed for IPO in the history of the Bahamian capital markets", Tribune Business was told yesterday, one of its placement agents confirming it was "well over three times' oversubscribed". Kenwood Kerr, chief executive of Providence Advisors, said the subscriptions received from around 8,000 applicants meant the initial public offering (IPO) had "surpassed" the $32 million mark, disclosed by Tribune Business on Thursday, even before all the counting was completed. Describing the APD offering as "a real awakening" of the Bahamian capital markets and investor appetite, more so than last year's $62.5 Commonwealth Brewery issue, said the issue was another step to spreading wealth creation and building a "shareholder economy". "We know for certain this is the most subscribed for, the most widely subscribed for IPO in the history of the capital markets in the country," Mr Kerr told Tribune Business. "And, at the end of the day, we'll have the largest shareholder base from a retail and institutional perspective. There'll be none larger or with more shareholders." The Providence Advisors chief said the APD placement agents expected to ultimately end up "in the vicinity" of 8,000 subscribers. He added that they had "already surpassed" the $32 million market in terms of the value of shares subscribed for. "We're well over three times' subscribed," Mr Kerr said of the $10 million IPO. "Our expectations were high for the issue, based on its evaluation metrics, business model and management, but our expectations in terms of demand were exceeded. We always anticipated that it could be oversubscribed, but to the degree we're seeing we're pleasantly surprised." Given the relative lack of alternative investment options with comparable returns, especially given last summer's Bahamian Prime rate reduction, the APD IPO was always likely to attract a high level of interest, even before the Government's offer of interest-free salary advances so civil servants could acquire shares. APD's metrics, at least on the face of it, were attractive, especially given that it has a monopoly by being the only port of entry for all physical goods coming into New Providence. It has a long-term lease and 20-year port exclusivity from the Government, further enhancing its attractiveness. Given the level of Bahamian public investor interest, and the possibility that total subscriptions could finish in the $35-$40 million range, some may ask whether there should have been a 'role reversal', so to speak, with the planned private placement preference share offering seeking just $10 million instead - as opposed to the likely $43 million. But selling a $35-$40 million stake in APD would have left both the Government and shipping industry private sector with minority interests of around 25 per cent each, and the public with 50 per cent. Such an outcome would not have been desired, especially by the private sector. There also exists a body of opinion that believes the IPO was underpinned by political considerations, at least from the Government's perspective. These feelings, expressed privately to Tribune Business by several in the private sector, believe the offering was intended to get public opinion on the side of the Arawak Cay port relocation, and also provide another line of defence to any attempt by an incoming Progressive Liberal Party (PLP) government to move the project. Nevertheless, the objectives of broadening wealth creation and Bahamian ownership of key economic assets are noble, and have been achieved. "This is a new sector that is being opened up for Bahamians to invest in," Mr Kerr told Tribune Business. "It creates more diversity, and all of these are objectives we wanted to achieve beforehand. It broadens and deepens the market. It's another opportunity to build, and fully diversify, an investment portfolio via a completely new industry. "It's critical for Bahamians, in a general sense, to participate in the ownership of the economy through these kind of investment opportunities.... We have to build that part of our economy, a shareholding economy, and this IPO is just one of the first steps to that critical end. This is a very good first step." Apart from building a broad Bahamian shareholder base across the capital markets, Mr Kerr said it was vital to enhance investor education so that they understood investment opportunities presented to them, and make informed decisions as to whether to buy in. The last thing the Bahamas needed, he suggested, was investors who bought in based on "the herd instinct". Still, the Providence Advisors chief said the APD IPO was "a real awakening" of the Bahamian capital markets, "more so the case" than last year's Commonwealth Brewery IPO, which raised between $50-$51 million from the public, requiring the National Insurance Board (NIB) on the Government's behalf as underwriter to pick up the balance. "The point is money and capital is mobile, and goes to the best return," Mr Kerr added. "People invest where they understand the business and get a good return on their investment opportunity, and this [APD} was one of those cases."