Philippine Bourse Eyes More IPOs in 2021 Amid ‘Fragile’ Recovery

The Philippine Stock Exchange is aiming for more companies to go public this year even as the economic environment “remains fragile,” according to President and Chief Executive Officer Ramon Monzon.

The stock exchange has a target for at least three companies and four real estate investment trusts to hold initial public offerings in 2021, Monzon said in a statement. More REITs are expected to list once the Securities and Exchange Commission approves proposed changes to the main and small enterprises boards’ IPO rules, he said.

The Philippines is forecast to start growing only in the second quarter of 2021, putting it among the slowest to recover from the coronavirus pandemic that has ravaged the global economy. The central bank, which held its key interest rate last month at a record-low 2%, has said it stands ready to use a full range of tools to boost growth.

“Restoring the confidence of investors will continue to be a challenge,” Monzon said. The government’s plan to start mass vaccinations in the second half could “prompt a strong rebound in corporate earnings and thus allow the economy to take off,” he said.

Last year, grocer MerryMart Consumer Corp., broadband operator Converge ICT Solutions Inc. and real estate investment trust AREIT Inc. debuted on the exchange. Funds raised totaled 104 billion pesos ($2.2 billion) last year, up 2.9% from 2019, Monzon said. IPOs accounted for 44.3 billion pesos of the total, while follow-on offerings were 41.2 billion pesos.

More companies could return to the stock market as the Philippines recovers, the CEO said. The stock exchange is also planning to implement short selling, and introduce new sector and thematic indexes such as mid-cap and high dividend yield, he said.

“Hopefully, these new indices will entice the creation of new index-linked funds,” Monzon said.

©2021 Bloomberg L.P.

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