THE PHILIPPINE STOCK EXCHANGE, Inc. (PSE) hopes to increase the number of initial public offerings (IPOs) to six next year amid improved market conditions, PSE President and Chief Executive Officer Ramon S. Monzon told reporters on Tuesday.
“We had four IPOs (this year). I’m hoping to have maybe six (IPOs),” Mr. Monzon said when asked for his outlook for 2020.
The PSE saw four listings this year: Kepwealth Property Phils, Inc. in August; Axelum Resources Corp. and AllHome Corp. in October; and Fruitas Holdings, Inc. last week.
That was an improvement from 2018 when the bourse had just one IPO: that of D.M. Wenceslao & Associates, Inc. which raised about P8.15 billion.
Mr. Monzon said he believes the fundamentals are better heading into 2020, considering “very good” projected gross domestic product topping six percent and inflation that has been brought back within the central bank’s 2-4% target after last year’s successive muliyear highs that averaged a near-decade-high 5.2% for 2018.
Mr. Monzon said the only reason the stock market has not taken off this year is better prospects at the fixed-income market.
MORE ON DEBT FOR NOW
“I think what’s happening is a lot of the money that used to go to equity are all in fixed-income ngayon (now),” he told reporters.
“If you will look at the listing history of PDEx (Philippine Dealing & Exchange Corp.), this is one of their best years. A lot of corporate bonds, bank bonds. So all the capital raising activities were focused on them because of the lower interest rate.”
The PDEx breached the P300-billion mark in bond listings as of November, well above the P256.4 billion raised in 2018.
“That’s the challenge next year. It’s still very attractive to issue debt instruments, but I’m hoping that because they’ve been issuing a lot of debt instruments (this year), hopefully their debt capacity has already reached the maximum. In which case, they have to go to equity again,” Mr. Monzon said.
Also yesterday, the PSE signed a memorandum of agreement (MoA) with the Securities and Exchange Commission to be the bourse’s exclusive partner in promoting an Environment, Social and Governance (ESG)-based framework for its PSE Bell Awards.
“The MoA we signed today seals our commitment to our shared objective of growing a healthy capital market by fostering the adoption of ESG by publicly listed companies as a measuring tool for institutional investors and asset managers,” PSE Director Edgardo G. Lacson said during the signing ceremony at the PSE Tower in Bonifacio Global City in the City of Taguig. — Denise A. Valdez