Philippine stock exchange sees banner year for capital raising

July 2, 2021 - 3:40 PM
A janitor wearing a face mask cleans the lobby of the Philippine Stock Exchange amid the coronavirus disease (COVID-19) outbreak, in Taguig City, Metro Manila, Philippines, Sept. 30, 2020. (Reuters/Eloisa Lopez/File Photo)

MANILA — Capital raising activities in the Philippines’ stock market are expected to reach around $4 billion this year, as a slew of companies make their public debuts to fund expansion, the bourse operator’s president said on Friday.

Consumer firms and newly launched real estate investment trusts (REITs) are set to transform the bourse, a historical regional laggard, into Southeast Asia’s biggest market for initial public offerings (IPOs) this year.

The bourse operator recorded 122.46 billion pesos ($2.49 billion) in capital raised through IPOs and sale of existing shares in the first semester, outpacing the 104 billion pesos recorded for the entire 2020.

With four more IPOs and REITs lined up, funds that will be raised this year will likely approach the record 228.33 billion pesos ($4.6 billion) of 2012, Philippine Stock Exchange Inc President and CEO Ramon Monzon told a news conference.

“Because of the pandemic, debt financing, while very cheap, became difficult because banks had to tighten their lending standards,” Monzon said.

Another key driver is launches of REITs, which are property companies that offer regular dividends, he added.

Among completed offerings include Monde Nissin Corp’s $1 billion IPO, the Philippines’ largest-ever listing, in June and DDMP REIT Inc’s $302 million share sale in March.

In April, Del Monte Philippines Inc filed for an IPO that could raise up to 44.1 billion pesos, while a REIT unit of Megaworld Corp is launching an up to 27.3 billion pesos IPO.

The Philippines’ broader index is down 2.2% year-to-date, the region’s second-worst performer next to Malaysia. ($1 = 49.21 pesos) —Reporting by Neil Jerome Morales; Editing by Martin Petty