SEC expects strong capital market rebound after pandemic

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THE Securities and Exchange Commission (SEC) is hopeful that the country’s capital market will have a strong comeback once the coronavirus disease 2019 (COVID-19) pandemic is over.

In an embargoed statement, the corporate regulator said it anticipates a strong recovery for both the stock market and the bond market, evidenced by sustained interest from investors while the COVID-19 crisis is ongoing.

“We are optimistic that the Philippine capital market will make a strong recovery from the impact of the COVID-19 pandemic,” SEC Chairperson Emilio B. Aquino said in the statement.

“We take the success of recent fundraising activities as one indication of the investing public’s continued confidence in the strength and resilience of our corporate sector, capital market and economy as a whole, especially with the reinforcements coming from the government,” he added.

The SEC cited several examples that prove continued trust from investors while the outbreak is ongoing: the successful offering of P15-billion bonds by SM Prime Holdings, Inc. on March 25; strong investor demand that pushed Bank of the Philippine Islands to announce a P33.9-billion bond issuance on March 27; and oversubscribed offering of Rizal Commercial Banking Corp. to raise P7.05 billion on April 7.

It added Aboitiz Power Corp. is planning to issue within the next two quarters the fourth tranche of its P30-billion fixed-rate bonds composed of P9.55-billion bonds.

“We are hopeful that the Philippine capital market will come out stronger and even more resilient in the end. As such, it can better contribute to the promotion of financial inclusion and wealth democratization toward the fulfillment of our shared aspiration for a secure, comfortable life for Filipinos,” Mr. Aquino said.

Declining investor sentiment due to the COVID-19 pandemic has pushed the stock market to enter bear territory on March 9. The Philippine Stock Exchange index (PSEi) is now at 5,510.83 as of Wednesday, down 34.5% from its 52-week high of 8,419.59.

As much as P1.16 trillion have been wiped out from the market at one point, when trading resumed after two days of shutdown due to the government’s Luzon-wide lockdown to contain the virus.

But Mr. Aquino noted the decline of the PSEi is no different from what’s being observed around the world. He added it is “crucial” at such a time like this to keep the capital market operating efficiently and reliably amid the COVID-19 pandemic.

The regulator has rolled out several initiatives to support the market as it operates under unique conditions. Some of these are immediately approving off-site trading protocols and relaxing disclosure requirements for listed companies.

“The SEC will continue monitoring developments in the capital market and remain proactive in supporting trading participants, issuers and investors in seeing through the uncertainties brought about by the COVID-19 pandemic,” Mr. Aquino said. — Denise A. Valdez