PSE: Initial public offerings to hit record high this year

The Philippine Stock exchange Inc. (PSE) said the number of companies going public may hit record high this year, but the amount could still be lower than the previous year, when Monde Nissin Corp. conducted an initial public offering (IPO).

PSE President and CEO Ramon S. Monzon said the bourse already had eight IPOS in the first half, which matches the number of offerings for the entire 2021.

Of the eight companies that conducted their IPOS, 5 were listed on the main board while three joined the small, medium and emerging board.

Listed firms that debuted in the first half were Haus Talk Inc., Figaro Coffee Group Inc., Citicore Energy REIT Corp., Bank of Commerce, CTS Global Equity Group Inc., Raslag Corp., VISTAREIT Inc. and Balai ni Fruitas Inc.

“Given the lineup of maiden offers in the next half of the year, we may see a 26-year high in terms of the number of IPOS in a year,” Monzon said.

The amount of capital raised from the sale of primary and secondary shares in eight IPOS, one stock rights offering and four private placements during the first half of 2022 reached P61.92 billion, lower by half compared with the previous year.

The fund raising amount in the same period last year was P122.46 billion, boosted by Monde, the largest IPO in PSE history that raised P55.89 billion.

“The record fund raising in 2021 will be difficult to break because of the sizable amount that was generated by the Monde Nissin Corp.’s IPO. We have a robust pipeline of public offerings in the second half and if all of these materialize, capital raising may still reach the P200 billion mark,” Monzon said.

“To sustain the listing activities at the PSE, we now have in place rules on initial listing through a preferred shares offering that gives companies the flexibility to tap the equities market by selling preferred shares instead of common shares. The lock-up rule has also been amended recently to give select entities an early exit mechanism when a company they invested in goes public. This frees up capital of alternative investment funds to reinvest in other target firms and increases the number of available shares to IPO investors.”

In terms of trading activity, the daily average value turnover as of June 30 was at P7.52 billion, down by 16 percent year-on-year. Foreign investors were net sellers during the January to June period at P40.73 billion, lower than the P77.86 billion net foreign selling registered in the same period in 2021.

The benchmark PSE index closed at 6,155.43 points on the last trading day of the semester and posted a 13.6-percent decline year-to-date. The All Shares Index and five of the six sectoral indices also registered year-to-date losses of between 10 percent and 17 percent. Only the Mining and Oil index ended in the green, as it was up by 17 percent year-to-date.