The Philippine Stock Exchange (PSE) is confident it will finally hit this year its long-running P200-billion goal for capital fund raising as companies race to boost spending on expansion projects.
In a press briefing on Monday, PSE President and Chief Executive Officer Hans Sicat said the bourse is “on track” to reach the P200 billion target of capital fund raising, given increased corporate demand and the right market conditions.
“We think that’s a reasonable target this year. The conditions are right for issuance. First, in the financial segment, they are raising capital to buff up their Basel 3 ratio. Second, from various firms expanding, there is a huge demand to put up capex [capital expenditure]right now, which means there could be more equity fund raising,” Sicat said.
“Last year, there has been an increase also in the bond market. We think this will also boost the equities market. Third, the confluence of events means higher prices in equity raising,” he added.
Since end-December last year, the local bourse has raised about three-fourths or P153 billion of the P200 billion target, which was made possible by the increase in follow-on offerings, five initial public offerings (IPO) and two listings by way of introduction.
The companies that conducted their IPOs last year were Xurpas Inc., Phoenix Semiconductor Philippines Corp., SSI Group Inc., Double Dragon Properties Corp. and Century Pacific Food Inc., while those that listed by way of introduction were Trans-Asia Petroleum Corp. and Top Frontier Investment Holdings Inc.
Those that held follow-on offerings in 2014 included Max Group Inc., Integrated Micro-Electronics Inc. and 8990 Holdings Inc., among others.
Last year, the PSE recorded a 2.7 percent increase in net income to P867.55 million from P844.77 million in 2013. Its operating revenues and other income rose by 4.1 percent to P1.71 billion due to close-to-flat gains from listings last year.
Aside from Global Ferronickel Holdings Inc.’s anticipated P32-billion follow-on offering, expected market debuts in 2015 include the initial public offerings of Company of Friends Inc. (P7.7 billion), Gweilo Corp. (P75 million), Crown Asia Chemicals Corp. (P200 million) and Green Power Panay Philippines Inc. (P290 million), as well as the backdoor listing of National Book Store Inc. via Vulcan Industrial Mining Corp., and the yet to be finalized backdoor listing of JDVC Resources Corp. through Island Information and Technology Inc.
The PSE expects nine to 10 companies listing on the exchange this year.