Newly re-elected Philippine Stock Exchange president Hans Sicat said the market’s recent decline on political jitters is somewhat “overdramatized,” predicting that trading will pick up after the national elections.
“We are giving politics too much weight. The economic fundamentals of the country are extremely solid. We have great indicators of strength which has been confirmed by many multilateral agencies and the country is expected to grow at six percent GDP this year perhaps even higher in 2017,” Sicat said.
“I think maybe fears might be at this stage overdramatized. We still have to see who… the economic [team] that could be chosen to serve,” Sicat added.
Analysts earlier said the apparent lack of economic plans from leading Philippine presidential candidate Rodrigo Duterte was causing investors to be jittery.
Sicat, however, said the market’s recent decline was largely due to global market conditions and not solely on the pending national elections.
“It could e noted that over the last two weeks, the major trend has been for exchanges in Asia to go down primarily as a result of various expectations, various areas like the interest rate hike in US and BOJ non-movement in Japan and some other currency differentials as some of the drivers,” Sicat said.
While market activity had been muted during the first four months of the year, Sicat expects the trading activity to pick up after the elections, especially on companies planning to conduct initial public offerings.
“We expect market activity to pick up after the national elections, as there will be less volatility, at least locally,” Sicat said.
He expects IPOs that have previously postponed their fund raising activities to push through after the national elections.
Among the IPOs that were deferred from last year were the P12.3-billion public offering of DM Wenceslao & Associates Inc. and the P4.65-billion listing of Datem Inc.
Business process outsourcing firm Pointwest Technologies Corp. and mining company TVI Resource Development (Philippines) Inc. which earlier planned to conduct their IPOs in early 2016 also decided to move their fund raising activities to the second half of the year.
Two companies—CEMEX Holdings Philippines Inc., the local unit cement unit of Mexico’s Cemex S.A.B De C.V., and Golden Haven Memorial Park Inc., the country’s leading death care development and services firm owned by the Villar group—recently filed their IPO applications with the Securities and Exchange Commission.