PSE raised B in 2018, sees challenges in 2019

Local companies raised 1187.84 billion through new listings at the Philippine Stock Exchange, up 12 percent from the 1167 billion registered in 2017 but slightly short of the 1200-billion annual target of the bourse.

“We did not hit 1200 billion target. We are going to try hitting 1200 billion next year,” PSE President and CEO Ramon S. Monzon said in an interview.

He added that the amount raised this year was mainly from the big banks that needed to increase their respective capitalizations.

Fund-raising activities of listed firms were affected by market turbulence starting in the middle of the year, particularly when inflation rate and interest rates began to rise.

The PSE had been eyeing eight initial public offerings for this year but only one materialized, D.M. Wenceslao and Associates, Inc., which raised 18.15 billion.

Del Monte Philippines, Inc. and Taiwanese firm Cal-Comp Technology (Philippines), Inc. were both forced to shelve their respective IPO plans this year as the PSE index fell into bear market territory.

For next year, Monzon said the PSE will still aim to raise 1200 billion from listings at the bourse but noted that it will be harder to achieve in 2019 as banks have already raised their capital this year.

“What are the challenges for next year? All the big banks have already raised capital from Metrobank, BPI, RCBC, and even worse now, bank bonds now have been approved, so everybody go to the bank bonds because the requirement there is very small,” he said.

Monzon also noted that there is a new regulation that makes it easier for banks to raise money through bond issuances.

The Bangko Sentral ng Pilipinas recently relaxed some of its rules to make it easier for lenders to float bonds without asking for central bank approval.

BSP governor Nestor Espenilla said they are treating lender like any other a non-financial corporate, a bond can be issued by a bank following the bonds issuance rules of the Securities and Exchange Commission.

Monzon said the PSE needs more IPOs next year and will have to offer new products to perk up the fund raising activities.

“Next year, I guess it will depend on the market. If the market really is in the high 7,000 or 8,000, they may be encouraged to do their IPO,” he said.

He said Del Monte Philippines is still waiting for market conditions to improve for their IPO. Cal-Comp, the Taiwan firm also expressed its interest to list next year.