PSE eyes 8 to 10 IPOs in 2016; sees PhP200-B capital-raising a good target

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MANILA – Eight to 10 companies are expected to debut in the local equities stock market in 2016, as they ramp up expansion plans in a bet on the country’s economic growth despite global headwinds.

“Two (listings) have been moved next year so I think right now, we’re probably in the same target at eight to 10 (companies),” Philippine Stock Exchange (PSE) President Hans Sicat told reporters.

Sicat said more companies engaged in real estate and consumer/retail sectors are expected to launch their initial public offering (IPO) on the local bourse next year.

“Elections are good for consumer spending so that sector always benefit. Media (industry) benefits quite well from elections.

And I think even the current increase of government spending in infrastructure-related projects and all other infrastructure-related projects of the private sector are going to do well. These means that you have a lot of positive multiplier effects for the economy,” he noted.

Sicat expects more listings in the first quarter, a month prior to presidential elections in May, including those of Datem Inc. and DM Wenceslao and Associates Inc. which have reset their IPOs for 2016.

“You might have a slight slowdown in the second quarter (because) people are waiting for election results. And then another round of activity in the third quarter,” he said.

The head of the exchange said the IPOs will be driven by companies’ plans to increase their footprints across the country.

“Even though there might be external volatility because of interest rate increases started by the United States Fed, we’re hoping that the level of local activity will more than compensate a lot of market volatility that could happen,” he added.

Apart from IPOs, Sicat said private placements, follow-on offerings and backdoor listings can boost next year’s capital fund-raising initiative of the PSE.

“I think, it (PhP200 billion) would be a good target but we have not officially set that target yet,” he stressed.

In 2015, Sicat expects raising PhP185 billion in capital, lower than PhP200-billion target, amid delayed IPOs.

“It’s been a weird 2015 this last quarter, even the third quarter… China did their surprise devaluation, and then there were fears of another rate increase in end-August, beginning September,” he said.

“Everybody just flew out of the emerging markets.

Net foreign selling increased more than expected. Locals are probably a little bit more cautious about getting into new transactions,” he added.