Capital-raising activities at the Philippine Stock Exchange this year could match or even exceed the record P228.3 billion in 2012, as companies continue to search for funds to finance expansion, the top executive of the local bourse said Friday.
PSE president and chief executive Ramon Monzon said in an interview capital raised in the first half of 2021 already reached P122.46 billion, with several huge fund-raising activities lined up in the second half.
These include the three real estate investment trust offerings of Filinvest REIT Inc. (P14 billion), RL Commercial REIT Inc. (P26.7 billion) and MREIT Inc. (P27.3 billion).
Del Monte Philippines Inc. also plans to conduct an initial public offering worth P44 billion, while fast-food chain operator Jollibee Foods Corp.is raising P12 billion from the issuance of preferred shares.
“Our all-time high in terms of capital raising was during the Aquino administration…Hopefully we can approximate that this year,” Monzon said.
Monzon said while bank financing remained cheap, companies were turning to the equities market as banks started to tighten their lending standards because of the pandemic. Some companies may also reach their bank credit limit, so they are tapping the equities market for financing requirements, he said.
The PSE reported that trading activity increased in the first six months, with a daily average value turnover at P8.96 billion, up 21.9 percent year-to-date and 35.9 percent year-on-year.
Foreign funds registered a net selling of P77.80 billion in the January to June period.
Monzon said the bellwether Philippine Stock Exchange index was expected to return to the pre-pandemic levels over the near term if the government could meet its target of vaccinating up to 70 million people by the end of the year.
“PSE still has a lot of activities lined up in the next six months, including the launch of new thematic indices, data analytics platform and revamped market education website. We will also continue hosting our twice-a-month market education webinars for retail investors, who have been very instrumental in driving the market’s development during the pandemic,” Monzon said.
Capital raising activities from January to June included two initial public offerings, two follow-on offerings, two stock rights offerings and three private placements.
“We are pleased that companies continue to tap the equities market for their funding requirements. Capital raising activities at PSE continue to be robust and we remain optimistic that we will be able to hit our targets by yearend. We will be conducting next month a few IPO marketing events targeted at SMEs to convince them to take advantage of our relaxed listing rules and the pandemic relief rule, which is in effect until next year,” said Monzon.
The PSE index closed at 6,901.91 on the last trading day of June, down by 3.3 percent year-to-date. The all-shares index retreated 0.7 percent. Among the sectoral indices, the services, financials, industrial and mining and oil sectors posted gains while holding firms and property sectors both ended lower.
“On May 14, the PSEi slid to its lowest intraday level for the year at 6,080.94 but we have seen the main index recover since, testing the 7,000-mark intraday on June 16. For the month of June, the benchmark index gained 4.1 percent month-on-month owing to increased investor confidence as more Filipinos get vaccinated. If government can meet its target of vaccinating up to 70 million people by the end of the year or even get close to said target, the stock market could return to pre-pandemic levels in the near term,” Monzon said.
“PSE still has a lot of activities lined up in the next six months, including the launch of new thematic indices, data analytics platform and revamped market education website. We will also continue hosting our twice-a-month market education webinars for retail investors, who have been very instrumental in driving the market’s development during the pandemic,” he said.
