The Philippine Stock Exchange plans to approve at least six initial public offerings in 2020.
PSE president and chief executive Ramon Monzon said in an interview local market should be more attractive to companies planning to list in the exchange given the sound macro-economic environment.
Monzon noted that the current low interest rate environment was luring companies to go to the debt market, such as bonds, for their capital raising activities instead of tapping the equities market.
“A lot of money right now is in fixed income market. If you look at the listing history PDEX ( Philippine Dealing & Exchange Corp.), this is one of the best years. So all of the capital-raising activities were focused on debt because of because of lower interest rates,” Monzon said.
Monzon said was looking forward to the approval of the proposed rules on Real Estate Investment Trust offering and Securities Borrowing Lending to boost liquidity in the stock market by the Securities and Exchange Commission.
SBL refers to the lending of stocks from an investor’s portfolio to a borrower who needed the stocks for settlement obligations to support trading strategies.
It involves the physical transfer of shares to the borrower while the lender still retains certain rights accruing to the shares of stocks lent.
The REIT offering, meanwhile, allows real estate companies to sell through an IPO shares of real-estate trusts that hold assets, like shopping malls and office buildings. Since these assets generate a steady stream of income, they will pay regular dividends to shareholders.
Several property firms, including Ayala Land Inc., DoubleDragon Properties Corp., Robinsons Land Corp. and SM Prime Holdings Inc. are awaiting the final rules of REIT to come out before finalizing their REITs offerings.
Only four companies conducted IPOs in 2019, namely Kepwealth Property Philippines Inc., Axelum Resources Corp., AllHome Corp. and Fruitas Holdings Inc.
Two IPO were deferred, namely Cal-Comp Technology Inc. and Metro Pacific Hospital Holdings Inc.
Capital raised through the stock market amounted to P72.3 billion as of Oct. 24, down from P181.6 billion in the same period last year.