Despite the volatility that hounded stock markets around the world, the size of the Philippine market got a boost from initiatives by companies raising capital to grow by P973 billion or 7.2 percent in 2016 from a year earlier.
The total market capitalization expanded to P14.44 trillion as of December 29, the last trading day of 2016, from P13.47 trillion in 2015, the Philippine Stock Exchange (PSE) said in a statement.
The initial public offerings (IPOs) and additional share sale by publicly listed companies helped grow the market and offset the downtrend in share prices.
The bellwether PSEi closed at 6,840.64 points on Thursday, down 1.6 percent from 6,952.08 exactly a year earlier on December 29, 2015.
Companies raised P170.12 billion this year, down by nearly 8 percent P184.60 billion for the whole of 2015. Both amounts were below the PSE’s yearly capital-raising target of P200 billion.
The daily value turnover was P7.81 billion on average, down nearly 13 percent from P8.96 billion in 2015.
“The market experienced a lot of volatilities in 2016 arising from unexpected developments in the global political landscape as well as the interest rate hikes in the US,” PSE President and Chief Executive Officer Hans B. Sicat said.
“Despite this, we churned a relatively healthy capital-raising number considering most of the activities happened during the second half of the year. This is a testament to the strength of the local economy,” Sicat noted.
The PSE is preparing to launch new products that include Dollar Denominated Securities (DDS) and the listing of Public-Private Partnership (PPP) companies in 2017, after the Securities and Exchange Commission approved in late 2016 the rules governing both products.
“We are pleased to add two new products to the list of capital raising instruments available on the PSE. These products should help facilitate additional listing activity and investor participation in the market,” Sicat said.
The broader All Shares index concluded 2016 with a 4.1 percent gain to 4,156.07, while the Mining and Oil index churned out the best performance with a 13.7 percent gain.
“We believe there will be a healthy pipeline of initial public offerings and other fund raising activities in 2017. We will continue to work with our regulators so we can continue to introduce new products for our market in 2017 as we have successfully done so this year,” Sicat noted.
The IPOs this year included:
Golden Haven Memorial Park Inc. for P778-million in June; Cemex Philippines Holdings Corp. for P25 billion in July; Pilipinas Shell Petroleum Corp. for P18.425 billion in November ; Shakey’s Pizza Asia Ventures Inc. for P3.96 billion in December.
Other IPOs that will likely happen in 2017 include Wilcon Depot Inc. (P7.9 billion), Audiowav Media Inc. (P2.6 billion) and Xeleb Technologies Inc. (P800 million).