PSE keeps P200-B capital raising target

The Philippine Stock Exchange (PSE) expects that less volatility in the stock market will bring back issuers seeking to raise fresh capital.

Despite the recent selldown and market volatility, the PSE is sticking to its target to facilitate P200 billion worth of capital raising programs this year, its chief executive said.

“I think what we will hopefully prove correct is as the market gets calmer with the situation, more issuers will come out,” PSE president and CEO Hans B. Sicat told reporters.

“In the last five weeks that the volatility happened, none of the fundamentals of the Philippines has changed,” Sicat said.

Since hitting the 31st all-time high this year at 7,392.20 on May 15, the PSE index has fallen to 6,465.28 as of Friday. Week- onweek, the main index rallied 4.57 percent or 282.11 points to end at 6,465.28, snapping a five- week slump.

“Despite the recent volatility, there continues to be a lot of interest like in follow-on offerings,” Sicat said, adding that the PSE has approved several share sale plans.

However, pricing the shares proved difficult given volatile swing in share prices, prompting issuers to wait for the market to stabilize before raising fresh funds, Sicat said.

On June 13, the main index plunged 6.75 percent or 442.57 points to end at 6,114.08 as foreign funds exit emerging markets given worries that the US Federal Reserve will pullback its stimulus program.

It marked the deepest single day drop of the main index since sinking by a record 12.27 percent on Oct. 27, 2008 at the height of Lehman Brothers’ bankruptcy that resulted in the global financial crisis.

But with the recent recovery in share prices, Sicat said “the comfort level certainly has increased.”

PSE is not changing its target in terms of capital raising in the PSE this year.

“So far, we’re cautiously optimistic. Nothing has changed in the underlying economy,” Sicat said.

Coupled with follow-on offering transactions of already listed firms, PSE aims to facilitate capital raising that will generate around P200 billion in funds.

It also expects seven to 10 initial public offerings, up from five last year.

In 2012, capital proceeds from private placement, stock rights offerings and follow- on offerings amounted hit P50.38 billion, P52.07 billion and P92.64 billion, respectively.