The Philippine Stock Exchange (PSE) expects about six to eight company stock listings this year, down from the usual target of 10 initial public offerings (IPOs) and follow-on offers in recent years, with market sentiment remaining fragile due to global uncertainty.
Market volatility may keep companies from launching their equity fundraising this year, but they “would still need to raise money through the market to fund their expansion plans and refinance their obligations,” PSE president Hans Sicat told reporters before the New Year holidays.
“We see six to eight listings this year,” Sicat said, without giving specific names.
In the pipeline, however, are companies seeking regulatory approvals for their IPOs, such as home improvement and construction supplies retailer Wilcon Depot Inc. (P7.9 billion); information technology firm Audiowav Media Inc. (P2.6 billion); celebrity game developer Xeleb Technologies Inc. (P800 million); and Mazda distributor Bermaz Auto Philippines Inc. (P1.24 billion), among others.
Last year, the local bourse launched only four IPOs as investors started shifting positions to bet on the anticipated interest rate hikes in the US.
“The Philippines still remains to be a relatively refracted area,” he said, citing the country’s strong economic fundamentals that shield the market from global shocks.
Sicat said some of the shares sale and listings—whether IPO or follow-on—are seen completed in the first quarter before any significant event happens during the rest of the year that can change the course of the market.
This year, the market is likely to be influenced by three major factors, according to PSE officials and some analysts: the three potential interest rate hikes by the US Federal Reserve, a clearer policy direction by new US President Donald Trump, and increases in global crude oil prices.
Some of the global jitters may be offset by the country’s sound fundamentals, such as strong consumer spending, OFW remittances and business process outsourcing (BPO), which are expected to continue to keep the economy and investor confidence afloat.
On top of this, the Duterte administration’s promise of accelerated infrastructure spending could also boost optimism among investors, Sicat said.
The PSE capped 2016 with four IPOs, namely: Golden Haven Memorial Park Inc., raising P778 millio n in June, Cemex Philippines Holdings Corp. in July (P25 billion), Pilipinas Shell Petroleum Corp. in November (P18.425 billion) and Shakey’s Pizza Asia Ventures Inc. in December (P3.96 billion).