The appetite for raising money from the equity markets remains strong despite the pandemic, with the Philippine Stock Exchange predicting record transactions this year.
The equities market registered a record P228.33 billion worth of capital raised in 2012.
PSE president and chief executive Ramon Monzon said even as the pandemic continues to affect overall businesses, companies are looking for alternative sources of funds to either finance expansion projects or pay off debt, as banks turn more cautious in their lending activities.
Some companies may also be reaching their bank credit limit so they are tapping the equities market for their financing requirements.
Meanwhile, some sectors, like the office leasing business, remain resilient during this difficult period. Property companies are spinning off their office portfolio into real estate (REIT) firms that could be listed on the Philippine Stock Exchange.
Through REIT, property firms are able to recycle funds to develop new projects and complete current ones.
“So far, we’ve hit P122 billion and with luck smiling on us, hopefully, we can approximate that high or maybe we can exceed that,” says Monzon.
The PSE recorded P122.46 billion in fresh capital raised from the sale of primary and secondary shares in the first semester, exceeding the P103.76 billion raised for the full of 2020.
Despite the recent decision of Del Monte Philippines Inc. to defer its P44.07-billion initial public offering due to volatile market conditions, there are still several fundraising activities in the pipeline.
Next after the jumbo P48.6-billion IPO of Monde Nissin Corp. and the recent P12.6-billion REIT offering of Filinvest REIT Corp. are two more REIT offerings from Megaworld Corp.’s MREIT Inc. (P27.3 billion) and Robinsons Land Corp.’s RL Commercial REIT Inc. (P26.7 billion).
AllDay Marts Inc., the grocery chain owned by the Villar Group, is seeking to raise P6 billion via IPO, while fast-food giant Jollibee Foods Corp. plans a P12-billion maiden preferred shares offering as an initial tranche.
Synergy Grid & Development Philippines Inc., whose sole operating asset is National Grid Corporation of the Philippines, operator of the country’s transmission network, reported plans to raise as much as P28.8 billion through a follow-on offering scheduled in October.
The offering will enable Synergy to raise its public float to 20 percent from the current 0.26 percent and comply with the minimum public ownership requirement of the local bourse.