SEC optimistic of strong recovery of capital markets

MANILA, Philippines — The Securities and Exchange Commission (SEC) is optimistic the Philippine capital market “will make a strong recovery” from the  coronavirus disease 2019 or COVID-19 outbreak on the back of strong support from the investing public.

“We are optimistic that the Philippine capital market will make a strong recovery from the impact of the COVID-19 pandemic,” SEC chairperson Emilio Aquino said.

According to Aquino, a number of listed companies intend to proceed with their respective fund-raising activities despite the outbreak.

He said the success of recent fundraising activities is an indication of the investing public’s continued confidence in the strength and resilience of the corporate sector, capital market and economy as a whole, especially with the reinforcements coming from the government.

Aboitiz Power Corp., for one, intends to proceed with the issuance of the fourth tranche of its P30 billion worth of fixed-rate bonds under shelf registration with the SEC, amounting to P9.55 billion.

Ayala-led BPI on March 27 also announced the issuance of P33.9 billion worth of bonds, with a tenor of 1.5 years and an interest rate of 4.05 per annum.

Strong investor demand allowed the bank to upsize its P5-billion base offer more than six times and end the offer period 11 days ahead of the March 17 schedule.

Sy-led SM Prime Holdings has also issued bonds worth P15 billion. The public offering, which ran from March 2 to 13, comprised five and seven-year bonds paying 4.8643 percent and 5.0583 percent in annual interest, respectively.

The stock market, which has been severely battered by the COVID-19 pandemic, saw its market value wiped out by more than a trillion pesos. 

The bourse-imposed circuit breaker has been triggered three times since the confirmation of the first local transmission of COVID-19. 

Trading at the equities bourse was first halted on March 12, when the PSE index breached the 10 percent threshold. The circuit breaker was again triggered on March 13 as the bellwether fell by 10.43 percent upon opening.

The latest market halt was implemented on March 19, just when trading resumed from a two-day suspension prompted by the imposition of enhanced community quarantine over Luzon. 

The PSEi continued to decline by 24.30 percent to a level last seen during the global financial crisis in 2008.

Aquino said that the SEC has been implementing measures to ensure that the capital market continues to operate efficiently.

“The SEC will continue monitoring developments in the capital market and remain proactive in supporting trading participants, issuers and investors in seeing through the uncertainties brought about by the COVID-19 pandemic,” Aquino  said.