The Philippine Stock Exchange expects capital raising from the equities market to surpass the P200-billion target this year despite the current volatility.
PSE chief operating officer Roel Refran said in an interview capital raised from the local bourse reached P181.6 billion as of end Oct 18, up 13 percent from P160 billion recorded year-on-year.
Capital raised through the stock market includes initial public offerings, follow-on offerings, stock rights offering and sale of preferred shares.
“On a five-year average, we are higher in terms of amount of capital being raised driven mostly by banking sector because of their rights offering,” Refran said.
“We see this a good trend in terms of people seeing good valuations may also be prime for them to equip their shareholder with additional capital base with the rights offering,” he added.
Two of the country’s largest banks—Metropolitan Bank & Trust Co. and Bank of the Philippine Islands—conducted rights offering at the start of the year to raise a combined P110 billion in fresh capital.
With several deals still in the pipeline including the planned P49.6-billion follow-on offering of San Miguel Food and Beverage Inc. slated next month, the PSE will likely exceed the P200-billion target it set at the start of the year and may even surpass the record P219 billion achieved in 2012.
Refran conceded that the liquidity in the stock was on a decline as average daily value traded dropped significantly from P8 billion in 2017 to less than P7 billion this year, after foreign funds exited emerging markets, including the Philippines.
Sun Life Financial Philippines chief investment officer Michael Enriquez in a recent forum said the local stock market had been leaving the market and were struggling to get out of the Philippines because of the the lack of liquidity.
“That is why we continue to see foreign selling. I think that is not really new funds coming out but programmed selling which takes a long time for them to execute their orders because the Philippine equities market is not deep enough,” Enriquez said. Jenniffer B. Austria
“Average daily trading has gone down to below P5 billion on an average and that is less than $100 million a day. That has not changed since the market decided to move to a whole day trading. So there has been no improvement in the daily turnover and that has been quite difficult for foreign fund managers and foreign investors to execute their activities at the stock market,” he added.
The index is down 16.4 percent to 7,151.52 year-to-date, on concerns of rising interest and inflation rates, as well as the weakening of the peso against the dollar.