PSE bullish on more IPOs in bearish 2022

The Philippine Stock Exchange (PSE) said new company listings could reach an almost three-decade high in 2022 despite global recession worries that have pushed recent initial public offering (IPOs) investors underwater.

PSE president and CEO Ramon Monzon said eight companies went public in the first semester of the year, with more firms planning to list or raise funds via the equities market over the next six months.

“Given the lineup of maiden offers in the next half of the year, we may see a 26-year high in terms of the number of IPOs in a year,” Monzon said.

The eight IPOs were Haus Talk Inc., Figaro Coffee Group Inc., Citicore Energy REIT Corp., Bank of Commerce, CTS Global Equity Group, Inc., Raslag Corp., VistaREIT Inc. and Balai ni Fruitas Inc.

Last month, billionaire Enrique Razon Jr. filed a P28 billion IPO to take his utilities and infrastructure group, Prime Infrastructure Capital Inc., public by October this year.

The PSE said more IPOs were on the way but fundraising amounts have been smaller, especially when compared with last year’s offerings.

The money raised from new listings, stock rights offerings and private placements reached P61.9 billion in the first semester of 2022, the PSE said. But this was about 50 percent down from the same period in 2021, which saw the record P55.9 billion IPO of Monde Nissin Corp.

“The record fund raising in 2021 will be difficult to break because of the sizable amount that was generated by the Monde Nissin Corporation IPO,” Monzon said.

He said the PSE could still reach P200 billion in full-year capital raising activities for 2022 should companies push through with their plans. A total of P234.5 billion was raised at the bourse last year.

The benchmark PSE index has plunged 13.4 percent since the start of the year as sentiments were battered by surging inflation and rising interest rates, threatening the economy’s recovery in the postpandemic period.

As a result, investors in 12 out of 19 IPOs launched in the past two years remained in the red as of Friday’s close, data compiled by the Inquirer showed.

For 2022 alone, only solar power company Raslag Corp. (+2.5 percent) and billionaire Manuel Villar Jr.’s VistaREIT (+0.57 percent) were above their IPO price. The biggest IPO loser since 2020 was Virgilio Villar’s Medilines Distributors Inc., which was down a staggering 74 percent below its debut price.

Stock market veteran Jonathan Ravelas, who recently joined e-Methods for Business Management Corp. as consultant for financial services and strategy, said new IPOs could still be attractive despite poor market sentiments.

“IPOs with minimal share offerings with a good story do well during these times,” Ravelas told the Inquirer.

Meanwhile, Monzon pointed to recent revisions to their listing rules to support IPO activity.

“[W]e now have in place rules on initial listing through a preferred shares offering that gives companies the flexibility to tap the equities market by selling preferred shares instead of common shares,” Monzon said.

“The lock-up rule has also been amended recently to give select entities an early exit mechanism when a company they invested in goes public. This frees up capital of alternative investment funds to reinvest in other target firms and increases the number of available shares to IPO investors,” he added. INQ