After nearly P140B fund-raising in 2016
Companies raised nearly P140 billion through the fixed income market in 2016, exceeding the P100 billion revised target set for the year by the Philippine Dealing and Exchange Corp (PDEx) despite the market volatility triggered by fears of interest rate hikes.
PDEx President and Chief Operating Officer Cesar Crisol told The Manila Times late last week total funds raised and listed on the exchange last year reached “just under P140 billion,” surpassing the P100 billion target, which had been lowered from the previous target of P200 billion, and the P107 billion raised and listed in 2015.
Crisol and Teresita Herbosa, chairperson of the Securities and Exchange Commission (SEC), said growth came from shelf registration issuances, kickstarted in 2016, which encouraged firms to raise funds not only via the equities market, but also the debt market.
For both equities and bonds, “almost 90 percent” of the corporate fund raisings in 2016 came from shelf registration issues, mainly by renewable energy companies, Herbosa said.
This year, fund-raising by the PDEx via the fixed-income market is expected to reach P150 billion, boosted mostly by issuances in the first few months of the year to finance infrastructure-related projects and contracts, Crisol said.
“Basically the infrastructure projects need to be funded this year, and there’s the desire of issuers to get ahead of the increase [expected]in interest rates. So those will be the major drivers,” Crisol said.
“Issuers who will be active this year are mostly those who are involved in infrastructure. Those are the companies that are tapping the capital markets. And some of the banks for their LTNCD [long term negotiable certificates of time deposits]issues,” he added.
To date, the PDEx has seen more than P30 billion worth of issuances, faster than in the first two months of last year.
The PDEx has registered a total of P656.91 billion outstanding issuances by 40 companies, comprised of 114 securities.