By James A. Loyola
Local companies raised P187.84 billion through new listings at the Philippine Stock Exchange, up 12 percent from the P167 billion registered in 2017 but slightly short of the P200 billion annual target of the bourse.
“We did not hit P200 billion target. We are going to try hitting P200 billion next year,” PSE President and CEO Ramon S. Monzon said in an interview.
He added that the amount raised this year was mainly from the big banks that needed to increase their respective capitalizations.
Fundraising activities of listed firms were affected by market turbulence starting in the middle of the year, particularly when inflation rate and interest rates began to rise.
The PSE had been eyeing eight initial public offerings for this year but only one materialized, D.M. Wenceslao and Associates Inc., which raised P8.15 billion.
Del Monte Philippines Inc. and Taiwanese firm Cal-Comp Technology (Philippines) Inc. were both forced to shelve their respective IPO plans this year as the PSE index fell into bear market territory.
For next year, Monzon said the PSE will still aim to raise P200 billion from listings at the bourse but noted that it will be harder to achieve in 2019 as banks have already raised their capital this year.
“What are the challenges for next year? All the big banks have already raised capital from Metrobank, BPI, RCBC, and even worse now, bank bonds now have been approved, so everybody go to the bank bonds because the requirement there is very small,” he said.
Monzon also noted that there is a new regulation that makes it easier for banks to raise money through bond issuances.
The Bangko Sentral ng Pilipinas recently relaxed some of its rules to make it easier for lenders to float bonds without asking for central bank approval.
BSP governor Nestor Espenilla said they are treating lender like any other a non-financial corporate, a bond can be issued by a bank following the bonds issuance rules of the Securities and Exchange Commission.
Monzon said the PSE needs more IPOs next year and will have to offer new products to perk up the fund raising activities.
“Next year, I guess it will depend on the market. If the market really is in the high 7,000 or 8,000, they may be encouraged to do their IPO,” he said.
He said Del Monte Philippines is still waiting for market conditions to improve for their IPO. Cal-Comp, the Taiwan firm also expressed its interest to list next year.
AirAsia is also among the firms waiting to list but, because of the Boracay closure, it had also suspended its plan.
Meanwhile, some of the backdoor listings include Dennis Uy-led gambling venture PH Resort, which made its presentation with the PSE last week; the listing of Uy’s holding firm Udenna Corp.; and Tiger Resorts Asia Ltd., the operator of Okada Manila in Entertainment City.
“The backdoor listing is there. But we need more IPOs next year,” he said.