Technology and infrastructure firms seen ‘favorable’ for IPO

TECHNOLOGY and infrastructure companies must capitalize on the growing market interest and tap the capital market for growth, an investment management firm said.

“There are favorable industries for an IPO (initial public offering). I would say tech, and the sectors which did badly in the pandemic, they are the ones that are going to do very well this year and in the coming years and as interest rates go down,” Philequity Management, Inc. Vice President Miguel A. Agarao said at a Philippine Stock Exchange forum last week.

The Monetary Board has kept its benchmark rate steady at a near 17-year high of 6.5% for a third straight meeting in February.

In January, electronic platform GCash announced its IPO plans as it awaited a more favorable market.

For the year, the PSE remains optimistic about achieving its target of six IPOs despite Citicore Renewable Energy Corp.’s decision to defer its listing target to the second quarter.

“Property, infrastructure, and banks will do well especially if PPP (public-private partnership) gets finalized. Because the banks will lend more, and then there will be that huge magnifying effect if interest rates can materialize,” Mr. Agarao said.

In 2023, President Ferdinand R. Marcos, Jr. signed a measure aimed at streamlining the framework for PPPs.

The PPP Code, or Republic Act No. 11966, amended the Build-Operate-Transfer Law to create a unified legal framework for all PPPs at both national and local levels. Last month, Pangilinan-led Metro Pacific Investments Corp. said it was hoping to publicly list its planned joint venture company with San Miguel Corp. within the year.

It is difficult to predict growth among industries at this early stage, but the technology sector is expected to expand due to the ongoing digital transformation, according to a stock market analyst.

“As we all know, the stock market is inherently unpredictable, and various external factors such as geopolitical tensions, economic indicators, and unexpected events can influence sectoral performance,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

The growth of the technology sector will be driven by the global digital transformation, he said.

“Factors such as increased adoption of digital services, advancements in technology infrastructure, and demand for tech products could drive growth in this sector,” Mr. Arce said.

The infrastructure and construction sector will benefit from higher investments, especially in infrastructure projects through partnerships with the private sector, which can also spur industry growth.

“The government is expected to invest significantly in infrastructure projects through partnerships with private sector entities to stimulate economic growth. Factors such as government spending on infrastructure, urbanization trends, and demand for housing could drive growth in this sector,” he said.