PSE POSTS 71% DROP IN Q1 PROFIT, AIMS FOR BETTER TURNOUT IN 2ND QUARTER
The Philippine Stock Exchange (PSE) saw a 71.1percent year-onyear drop in its first quarter net profit as trading activities slumped while local asset yields declined during the onset of the new coronavirus disease (COVID-19) pandemic.
The local bourse posted P50.62 million in three-month net profit compared to its
P175-million bottom line in the same period last year. This was mostly due to a 184.3-percent drop in other incomes arising from lower interest income and fair value of investments.
“The COVID-19 pandemic definitely affected our revenues for the quarter. Investors opted to be liquid and held on to their cash, hence, the slowdown in trading activity particularly during the enhanced community quarantine (ECQ) period in Metro Manila and Luzon. Issuers also opted to put on hold fund-raising plans,” said PSE president and chief executive officer, Ramon Monzon.
The PSE’S operating revenue was down by 0.4 percent to P294.72 million, mainly due to the 1.2-percent drop in trading-related fees to P950,000.
On the other hand, listing-related fees increased by 3.8 percent or P4.25 million.
“We noted brisk trading activity in June. We hope this will be sustained in the coming months. But overall, we think investors will remain cautious as uncertainties from COVID-19 remain. They are also waiting for second quarter numbers of listed firms for a more concrete picture on how the pandemic impacted operations and consequently, revenues of companies,” Monzon said.
Total expenses (cost of services and administrative expenses) for the first quarter amounted to P142.56 million, down by 11.9 percent year-onyear due to lower operational and administrative costs. During the ECQ, the PSE operated without a trading floor and embraced work-from-home protocols.
Monzon said the PSE’S P150-billion original target for capital-raising initiatives would be “quite a challenge” as most companies would probably be reducing their capital expenditures and defer their expansion plans for the rest of the year.
“The only silver lining would be if banks become more strict and selective in their lending policy and listed companies who need funds have no choice but to raise the same from the equities market,” Monzon added.
The PSE is currently reviewing its listing rules to make fund-raising in the stock market more accessible to companies. It is also looking at potential digital services that can be introduced as a response to the new business landscape due to the impact of COVID-19.