Livelier IPO scene awaited

While the local market has yet to see more big names debuting on the bourse this year, companies that listed on the Philippine Stock Exchange (PSE) in the first semester made it to the list of Southeast Asia’s favorites, besting at least 60 other companies.

In its latest midyear initial public offering (IPO) report covering the region, global advisory firm Deloitte found that OceanaGold (Philippines) Inc., the first to brave the domestic stock market this year, raised the second-highest amount during its launch.

The local mining arm of Toronto-listed OceanaGold Corp. listed on the main board of the local bourse on May 13 and raised $104 million.

OceanaGold, the first mining company to list on the PSE in 12 years, followed Thailand’s Thai Credit Bank Public Co. Ltd., which debuted on Feb. 9 and raised $208 million.

Edgar Saavedra-led Citicore Renewable Energy Corp. (CREC) took the fifth spot with a total of $90 million raised.

Combined, the two firms raised $194 million for the Philippine market, representing 14 percent of the total $1.4 billion in equity raised in Southeast Asia and placing the country at No. 4 among all markets in the region.

This is also significantly higher than the $60 million raised from two IPOs in the first half of 2023, accounting for only 2 percent of the region’s total that year.

“The energy and resources industry remains a strong sector for the country’s capital market,” Deloitte says in its report.

Malaysia was ahead of its five neighbors—the Philippines, Vietnam, Singapore, Thailand and Indonesia—with $450 million raised from 21 IPOs, accounting for 33 percent of the total.

Thailand, with 17 IPOs worth $427 million, came in second.

Although Indonesia launched the most IPOs at 25, these only contributed 18 percent, or $248 million, ranking third.

Navigating geopolitical tensions

Overall, the region saw 67 IPOs in the first half versus 85 in the same period last year. The total amount raised was also slashed by 60 percent to $1.38 billion.

Tay Hwee Ling, Deloitte Southeast Asia accounting and reporting assurance leader, notes that while the IPO market has been “subdued” in the region, there is “cautious optimism that conditions will improve beyond 2024.”

”As investors and IPO candidates adapt to the new norm of higher interest rates and reduced liquidity, they are becoming more adept at navigating the complexity in geopolitical tensions and the global economic landscape,” Ling says, adding that real estate investment trust (REIT) listings may be on the horizon, especially once interest rates decline.

Locally, Maybank Securities Inc. head of research Kervin Sisayan tells the Inquirer that the country may not see more “big” IPOs this year, due mainly to the market’s volatility.

“The big names—you have SM Prime’s REIT, GCash, Maynilad—maybe they’ll list next year,” Sisayan says, pointing out that these firms may also be waiting for a clearer monetary policy direction from the Bangko Sentral ng Pilipinas, which has cut interest rates by 25 basis points to 6.25 percent.

SM Prime has said that it may not proceed with the listing of its REIT this year, as it’s “not a good time” yet.

Meanwhile, Ayala-backed e-wallet app GCash has been pushing back its IPO listing and has not yet disclosed a definite date.

Maynilad is mandated under its concession agreement with the Metropolitan Waterworks and Sewerage System to conduct its IPO on or before January 2027.

The water concessionaire previously said it planned to stage its stock market debut early next year.

Top Line Development Corp., a Cebu-based company whose core business is commercial fuel trade, has applied for an IPO in November and hopes to raise P3.16 billion. Top Line is the first company from Cebu to brave the stock market in seven years, after developer Cebu Landmasters Inc.

PSE president Ramon Monzon says Top Line’s IPO, five follow-on offerings and a stock rights offering would generate up to P48.36 billion in capital.

3 new listings so far

The local market has so far seen three IPOs this year. Apart from OceanaGold and CREC, businessman Dexter Tiu-led NexGen Energy Corp. went public in July.

The PSE set a target of six listings this year for a total equity deal of P40 billion, although analysts have warned that the market may not reach this goal due to unfavorable market conditions.

Monzon argues, however, that if a company “has a good story and it needs capital to pursue its development or expansion plans, [it] is the appropriate time to list your company.”

“The more companies that defer their IPO plans because of what they call poor market conditions, the more poor market conditions become a self-fulfilling prophecy,” Monzon says during NexGen’s listing ceremony. INQ