From REIT to rights: PSE may see record capital raised this year

Despite the country’s protracted war against the pandemic, the Philippine Stock Exchange (PSE) sees capital-raising activities, through the bourse, breaching this year the all-time high level of P228.33 billion last seen in 2012 during the term of the late President Benigno Aquino III.

This would be driven by the strong pipeline of real estate investment trust (REIT) offerings as well as corporations scouting for alternative funding as banks turn more cautious in their lending activities, bourse president Ramon Monzon said at a press briefing after the PSE’s stockholders’ meeting on Friday.

In the first semester, the PSE recorded P122.46 billion in fresh capital raised from the sale of primary and secondary shares, exceeding the P103.76 billion raised for full year of 2020.

Capital raising activities for the period included two initial public offerings (IPO), two follow-on offerings, two stock rights offerings and three private placements. The P48.6-billion debut of Monde Nissin last month was the single-largest IPO seen so far in the local stock market.

“So in six months, we have already eclipsed our actual accomplishments for last year … With luck smiling on us, hopefully we can approximate that high, or if we’re really lucky we can even exceed that high,” Monzon said, when asked about prospects for the rest of 2021.

Monzon cited a number of big REIT offerings in the pipeline, including Megaworld Corp.’s maximum offering of P27.3 billion, Robinsons Land’s P26.7 billion and Filinvest Land’s P14.9-billion maximum REIT offering.

Apart from the upcoming REIT listings, he also noted Del Monte Philippines’ proposed sale of as much as P44 billion worth of secondary shares and the P12-billion initial tranche of preferred shares offering planned by fast-food giant Jollibee Foods Corp.

These activities can potentially add as much as P124.9 billion to the PSE’s capital-raising accomplishment for 2021, bringing the full year total to P247 billion. This is assuming that the issuers can peg their offering at the maximum prices stated in their initial registration statements.

One big factor in all this is the take-off of REIT as a new asset class. REIT gives investors the option to invest directly in the finished products that are already earning money, such as office units, hotels, shopping malls, residences for rent, infrastructure ventures like toll roads and power plants.

“I call [Finance] Secretary [Carlos] Dominguez [III] the REIT hero, or the godfather of REIT,” Monzon said, referring to the Department of Finance’s easing of tax and minimum public ownership requirements that previously made REIT listings unviable. INQ