SOME of the private companies planning to launch initial public offerings this year are likely to consider deferring the plan given the current turmoil in financial markets, PSE President and Chief Executive Officer Hans Sicat said.
“The volatility in the market may be a negative factor and this could make companies hesitant to pull the trigger,” Sicat said at the Invest Asean Forum press conference on Wednesday.
Despite the massive selloff on Monday that pulled the main stock index into the 6,700 territory in one blow, the PSE official said the macroeconomic fundamentals of the country remain unchanged.
“The economic situation now is different from seven years ago, the successive growth in GDP [gross domestic product]has built a solid foundation for growth moving forward. I don’t think growth will reverse easily,” Sicat said.
Before the market slump, the PSE was expecting P100 billion worth of capital raising deals this year from three to five initial public offerings (IPOs).
“Our pipeline of IPOs suggests we still have a reasonably healthy second half. But it is too early to say whether all these transactions can be done in the second half or will be postponed for a few months,” he added.
One of the underwriters of the P4.65-billion planned IPO of construction firm Datem Inc. said the share sale will depend on what happening to the market.
“The timing will depend on the management and market conditions,” John Chong, Maybank Investment Bank Berhad chief executive officer, said.
Apart from Datem, other firms that have announced their IPO plans were D.M. Wenceslao & Associates Inc. (P21.7 billion), Metro Retail Stores Group Inc. (P6.1 billion), Gweilo Corp. (P75 million), Green Power Panay Philippines Inc. (P290 million), Philstocks Financial Inc. (P185.89 million) and Italpinas Development Corp. (P242 million).
Year-to-date, the two companies that listed on the stock exchange via an IPO were the Crown Asia Chemicals Corp. (P222 million) and SBS Philippines Corp. (P1.15 billion).
The PSE targets to reach P200 billion in capital-raising activities this year, banking on companies seeking funds for expansion.
As of August 15, the PSE registered P105 billion worth of deals from capital-raising activities, compared with P105.18 billion a year earlier. Private placements and stock rights offerings cover the bulk of the fund-raising deals in the equities market.