Citi upbeat on PH firms

MANILA, Philippines—Global banking giant Citibank is upbeat on the prospects of Philippine corporations in raising fresh funds from either debt or equity market.

It, however, urged potential issuers to act promptly as the “window” may narrow given lingering uncertainties in the overseas markets.

Also, Citi sees ample merger and acquisition (M&A) opportunities for Philippine companies not just domestically but also overseas via the route being taken by blue chips Jollibee Foods Corp., International Container Terminal Services Inc., SM Prime Holdings Inc., Integrated Microelectronic Inc. and Universal Robina Corp.

“I think the markets are open and we are constantly looking, scanning the markets for right opportunities for corporations,” Citi Philippines country officer Sanjiv Vohra said in an interview.

But instead of seeing a trend line, he said the markets would likely be “choppy and volatile,” which means corporations that were keen on selling debt or equity should always be prepared to look for the right window of opportunity.

“I think the windows will get narrower instead of wider,” he said.

Apart from mixed economic data in the US and the social unrest in the Middle East, global markets at present are still bothered by Europe’s fiscal woes.

Kristine Braden, Citi Philippines head of global banking, said Philippine corporate issuers continued to generate a lot of demand from the overseas markets. She noted that a number of unrated local corporate issuers had successfully forayed into the overseas capital markets because they were deemed of high credit quality and that the Philippines was considered a “safe harbor” given its sound macroeconomic fundamentals.

“The main challenge is not really credit worthiness but global credit conditions. There are a lot of risks that have caused volatility,” Braden said, noting the aversion caused by the social turmoil in the Middle East and the fiscal woes in Europe.

Braden said the local financial market remained liquid for those wishing to issue peso-denominated instruments.

Cross-border M&A involving Philippine corporations that intend to go overseas is likewise a big focus for Citi, Braden said.

“Historically, the largest companies were from North America, Europe and Japan. Today, some of the largest companies are from Asia or Latin America and even Africa. And from a banking services perspective, Citi is everywhere they want to go to,” Braden said.