A string of delayed listings this year will likely lead to a 2016 rebound for the Philippine Stock Exchange (PSE), the bourse’s president said.
Hans Sicat last week said he was optimistic that a P200-billion capital raising goal – missed this year as volatility forced companies to defer public debuts – would be achieved in 2016.
Initial public offerings (IPOs), he said, will “probably [be]more than this year. Many have been delayed. Two have been moved next year so I think right now we’re probably [looking at]… the same target — eight to 10 [IPOs].”
Factors that could boost the equities market, Sicat said, include the 2016 national elections and increased government infrastructure spending that would drive consumer sentiment.
“It means you have a lot of positive multiplier effects for the economy,” he said.
“And even though there might be some effects in the global markets because of interest rate [hikes], which is starting with the US Fed, we’re hoping that the local [developments]… will more than compensate,” he added.
Expected to be included in the eight to 10 expected listings for next year are Datem Inc. and DM Wenceslao and Associates Inc., which were supposed to debut at the PSE last week and had sought to raise P4.65 billion and P10.729 billion, respectively.
Sicat said most of the companies “would want to do most of the deals in the first quarter” ahead of the May national elections.
“We might have a slight slowdown in the second quarter [because]people are waiting for the election results. And then, [we expect]another round of [listing]activity in the third quarter,” he said.
Majority of the firms that will debut will come from the construction and real estate sectors, Sicat said, again noting the government’s infrastructure push.
With this year’s capital raising seen hitting only P185 billion, he said next year’s share sales would mostly be in the form of private placements and follow-on offering.
Sicat said many companies would be hitting single borrowing limits, which will prompt them to raise funds via bonds and stock offerings.
Only four companies staged IPOs this year, which led to the PSE missing a reduced target of five. These, and the amounts raised, were Crown Asia Chemicals Corp. in April (P222.78 million), SBS Philippines Corp. in early August (P1.155 billion), Metro Retail Stores Group Inc. in November (P3.62 billion), and Italpinas Development Corp. last December 7 (P207.44 million)
Companies that have also expressed interest in staging IPOs include Pro-Friends or Company of Friends, Inc., Green Power Panay Philippines, Inc., Gweilo Corp., Philippine Primark Properties, Inc., Philstocks Financial, Inc., Pointwest Technologies Corp. and Pilipinas Shell Petroleum Corp.