Fund-raising at the Philippine Stock Exchange (PSE) in 2020 reached P104 billion, up 2.9 percent from the prior year’s P101 billion.
Ramon Monzon, PSE president, is optimistic of a better market performance this year anchored on “expectations that confidence in our economic recovery will gradually return.”
“The government’s announced plans to start local mass inoculation to fight COVID-19 (new coronavirus disease 2019) starting the second half of 2021 would enable the lifting of all restrictions, prompt a strong rebound in corporate earnings and thus allow the economy to take off,” Monzon said.
“But understandably, the discovery of a new COVID-19 strain in the United Kingdom and the United States might put a dampener on investor sentiment again and that is why we are cautiously optimistic. We take comfort from the statements made by our economic managers the Philippine economy is poised for a recovery on the back of growth in OFW (overseas Filipino workers) cash remittances, record-high dollar reserves, strong Philippine peso and a resilient property market. However, we must admit restoring the confidence of investors will continue to be a challenge,” Monzon added.
Of the fund raising done last year, the PSE attracted P44.3 billion worth of initial public offering (IPO) P41.2 billion through follow-on offering, P5.6 billion through private placements, and P12.8 billion worth of stock rights offering.
“For 2021, although the current economic environment remains fragile because of the unpredictability of the COVID-19 situation, we choose to be optimistic and so we are targeting three IPOs and four REITs (real estate investment trust),” Monzon said.
He added companies might be enticed to tap REIT given the revised listing rules and especially so when the PSE receives approval from the Securities and Exchange Commission on the proposed amendments to the main and small board listing rules.
“We expect companies to return to the stock market as the local economy recovers from the impact of this pandemic,” Monzon said.
In particular, the PSE is looking forward to the listing of DDMP REIT Inc., a unit of DoubleDragon Properties Corp.
DDMP REIT has filed an application for a REIT IPO consisting of DoubleDragon’s seven buildings in its leasable properties in DD Meridian Park. DDMP REIT is looking to issue 6,536,737,316 secondary shares at P2.25 a piece for a total IPO offering of P14.71 billion. Listing date is eyed for February 26.
The PSE is looking forward to “a number” of follow-on and stock rights offerings in the pipeline which include $20 million and $250 million dollar-denominated securities of Cirtek Holdings Philippines Corp. and Cebu Air Inc., respectively, and the P5-billion stock rights offering by AC Energy .
Monzon said part of the PSE’s 2021 initiatives will be to introduce new products and to “leverage on technology to provide end-to-end digital experience for its stakeholders.”
“The new products we look forward to are the implementation of short selling as well as the introduction of new sector and thematic indices such as mid-cap and high dividend yield. Hopefully, these new indices will entice the creation of new index-linked funds.
Our technology-related initiatives, on the other hand, include the implementation of PSE EASy Phase 2, introducing an e-KYC (know your client) platform and development of a data analytics platform,” he said.