MANILA, Philippines – The recent recovery and less volatility in the local bourse will likely encourage large Philippine companies to pursue previously deferred initial public offerings (IPOs).
New products and services will also be rolled out late this year to entice more investors, the Philippine Stock Exchange (PSE) chief said.
“You are now seeing roadshows. That’s good and I hope these companies will be able to catch the window when they can issue,” PSE president and CEO Hans Sicat said.
“Hopefully, we will get a few of them done this quarter,” Sicat added.
The country’s stock exchange has partially recovered losses it suffered from hefty pullbacks from June to August.
Sources said the Gokongwei family’s Robinsons Retail Holdings Inc. is already conducting a road show for its P42-billion IPO while Resorts World Manila owner Travellers International Hotel Group has downsized its IPO to $450 million from $842-million due to weakness in the market. Both companies deferred plans to go public amid a market slump mid this year.
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“If firms can do the transaction successfully, they can come back to the market later on with other deals,” Sicat said.
“If they do a transaction that is very highly priced and tough to do in a particular market environment, it will be harder for them to come back with a second tranche of debt or equity,” Sicat said.
“I think there will be more companies coming to the market to take advantage of high price-to-earnings multiples,” said Michaelangelo Oyson, managing director of BPI Securities Corp.
Since hitting its 31st all-time high this year at 7,392.20, the benchmark Philippine Stock Exchange index has fallen to as much as 5,738.06 on Aug. 28 due to external volatilities. The main index has since recovered to 6,379.81 as of last Friday.
Sicat said investors will be encouraged by the continuing good fundamentals of the economy.
Oyson said investors are returning to the market after staying on the sidelines waiting for uncertainties to go away.
Given large IPOs, the PSE is confident in terms of matching last year’s haul. In 2012, capital proceeds from private placement, stock rights offerings and follow-on offerings hit P50.38 billion, P52.07 billion and P92.64 billion, respectively.
“We probably will hit the IPO numbers we are talking about,” Sicat said.
In terms of value turnover, the PSE has recorded an average trading value of P11 billion year-to-date, up from P8.5 billion last year, Sicat said.
The PSE is launching more products and services to encourage more investors.
Sicat said the first exchange traded funds (ETF) will be floated in the next few weeks. ETFs are securities and investment instruments that monitor a commodity of assets like an index fund but trades like a normal stock in an exchange.
The Philippines-linked derivatives products will also be launched late this year in partnership with the Singapore Exchange.
For the online trading platform, Sicat said more brokerage firms are set to adopt the system that allows investors to trade and monitor stocks using their own computers and smartphones.
“For us, all the stuff we are doing like trying to have more issuers, more products and services is to increase our menu of options for the PSE. Hopefully we will have a lot more to show the world or at least Southeast Asia by the time integration comes in,” Sicat said.
The cross-border trading plan involves Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, Singapore Exchange, Stock Exchange of Thailand and the PSE.