PSE net profit falls 71%, sees less IPO this year

The Philippine Stock Exchange, Inc. (PSE) reported a 71.1 percent drop in net income for the first three months of the year to ₱50.62 million from ₱175.00 million in the same period last year.

In a disclosure, the bourse said the decrease in net income was mostly due to a 184.3 percent drop in its other income on lower fair value of investments and lower interest income.

Operating revenues for the first quarter of 2020 was P294.72 million, 0.4 percent lower than the P295.80 million recorded in the first quarter of 2019. Operating revenues dipped because of a 1.2 percent decline in tradingrelated fees.

“The COVID-19 pandemic definitely affected our revenues for the quarter. Investors opted to be liquid and hold on to cash, hence, the slowdown in trading activity particularly during the enhanced community quarantine period in Metro Manila and Luzon. Issuers also opted to put on hold fund raising plans,” said PSE President and CEO Ramon S. Monzon.

Expenses for the quarter were reduced by 11.9 percent to ₱142.56 million from ₱161.82 million in the January to March 2019 period on lower operational and administrative costs.

“Meeting our original target for capital raising will 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,” said Monzon.

He added that, “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.”

“In terms of trading, we noted brisk trading activity in June. We hope this will be sustained in the coming months. But overall, we think that 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 explained.

The PSE is currently reviewing its listing rules to make fundraising in the stock market even more accessible to companies.

The company 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.