PSE sees recovery of capital raising activities next year

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) expects a recovery in capital raising activities in 2025, with this year’s total capital raised seen finishing below last year’s outcome.

PSE president and CEO Ramon Monzon said the country’s sole stock market operator is optimistic that bright spots such as easing inflation and interest rates will help create an ideal environment for capital raising next year.

“High interest rates prompted companies to opt out of raising capital from the equities market in the last few months, and more recently, the market’s volatility,” Monzon said.

“Given the remaining offerings in the pipeline, the number of capital raising activities and the total amount raised in 2024 will definitely be lower year-on-year,” he said.

In 2023, total capital raised from primary and secondary shares amounted to P140.95 billion, up by 28 percent from the P110.29 billion raised in the previous year.

Aside from the three initial public offerings (IPOs) in 2023, other capital raising activities conducted last year included five follow on offerings, five stock rights offerings and 11 private placements.

For this year, the PSE was originally targeting a total of six IPOs and about P175 billion worth of capital to be raised.

However, only three companies have so far went public this year — NexGen Energy Corp., OceanaGold Philippines Inc. and Citicore Renewable Energy Corp.

Top Line Business Development Corp. was supposed to be the fourth and last IPO for the year, but the company decided to move its planned market debut to the first quarter of 2025.

Monzon said the PSE continues to work with its Listing Engagement and Assistance Program clients that have been deemed ready to list to firm up their IPO plans.

The PSE is also gearing up for the launch of Global Philippine Depositary Receipts.

GPDRs are peso-denominated instruments each representing economic interest, but not voting interest, in an underlying security listed on an overseas exchange, where the holder has the option to convert the GPDR to the equivalent shares or units of the underlying security.

“We recognize the need to increase liquidity in the stock market. To this end, we are continuously working to introduce various products to attract more investors,” Monzon said.

“We also urge government to pass capital market legislative reforms, including the bill that seeks to reduce stock transaction tax,” he said.

From January to September, the PSE reported an 11.2 percent increase in its net income to P640.25 million from P575.65 million in the same period last year.

Its other income surged by 90.8 percent year-on-year to P326.17 million due to higher fair value estimates of the company’s investments in equity funds and US dollar-denominated bonds being managed by professional fund managers under a purely discretionary mandate.

Operating revenues, however, slipped by 5.2 percent to P1.04 billion, with listing-related revenues down by 6.7 percent year-on-year.