The Philippine Stock Exchange expects to grow its net profit and revenues by 10 percent this year, encouraged by the recent resurgence of foreign flows after the shakeout caused by the tapering of US monetary stimulus.
This suggests an expected rise in the PSE’s net profit to P929.28 million from last year’s P844.8 million on the back of higher listing and trading-related income. In 2013, revenues stood at P1.53 billion, which are targeted to rise to P1.68 billion this year.
In a press briefing, PSE president Hans Sicat said the local bourse was likewise on track with its goal of having about P200 billion worth of capital-raising activities this 2014, surpassing last year’s level of P175 billion.
“Liquidity is returning very much in consonance with what we’re hearing from investors,” Sicat said, adding that the panic on emerging markets was now subsiding.
Since the start of the year, he said about P52 billion worth of fresh capital had been raised from the stock market. About four to five initial public offerings (IPOs) are in the pipeline, with the PSE’s full-year target of 10 new stock debuts this year.
Sicat said the capital-raising activities would be partly driven by the requirement of banks to raise fresh core or tier 1 capital to meet the more rigorous requirements of the Basel 3 capital adequacy framework.
Universal and commercial banks were required by the BSP to adopt starting Jan. 1, 2014, the capital adequacy standards under Basel 3, which introduces a complex package of reforms designed to improve the ability of banks to absorb losses. This framework also extends the coverage of financial risks and puts in place a stronger firewall against periods of stress.
Aside from banks, Sicat said the branded consumer/retail sectors would likely continue to perk up local bourse activities.
For this year, the PSE is hoping to see a firmer regulatory framework for Personal Requirement and Equity Account (Pera) and derivatives futures. Pera is seen boosting the capital market by providing additional incentives to savings that are invested in eligible investment products.