By means of Revin Mikhael D. Ochave, Reporter
PROFESSIONAL SERVICES company Deloitte is cautiously optimistic about it the initial audience oFferings (IPOs). the Philippine Stock Exchange (PSE) for 2025, which could be led by the gaming and energy companies.
“The buzzword is cautious optimism,” Deloitte Singapore Transactions Accounting Support Partner Darren Ng said in a virtual briefing on Tuesday.
“I think from that perspective, if you also look at what’s in the pipeline for the Philippines, there should be more IPOs in 2025 in a mix of different industries.”
IPOs of companies in the gaming, energy and raw materials sectors could take place in 2025.
“There are two gaming companies, Okada Manila and Hann Resorts, and with continued interest in energy and resources, we think there should be more IPOs for the Philippines,” Mr Ng said.
The PSE previously said it expects six IPOs by 2025.
Several big names such as SM Prime Holdings, Inc.’s real estate investment trust, Razon-led Prime Infrastructure Capital, Inc., Maynilad Water Services, Inc. and the electronic wallet GCash, are said to be planning initial public offerings, but without a definitive timeline. .
There were only three IPOs this year, falling short of the PSE’s target of six. These were mining company OceanaGold Philippines, Inc. and renewable energy companies Citicore Renewable Energy Corp. and NexGen Energy Corp.
“In the first three quarters of 2024, the PSE saw three IPOs in the energy and commodities sector that raised US$203 million and reached a market capitalization of US$972 million,” Mr Ng said.
A fourth IPO was initially planned this year, but Cebu-based fuel retailer Top Line Business Development Corp. (Topline) decided to postpone it.
Topline announced on Monday that it is moving the offering period of its first issue to the first quarter of 2025, as the company accommodates institutional investors.
Based on data from Deloitte, the Philippines ranks fourth among Southeast Asian countries in terms of IPO amount raised this year. Malaysia led the region with $1.54 billion, followed by Thailand ($756 million) and Indonesia ($368 million).
The country is ahead of Vietnam ($37 million) and Singapore ($34 million).
“Southeast Asia’s strong consumer base, growing middle class and strategic importance in sectors such as real estate, healthcare and renewable energy remain attractive to investors,” Deloitte said.
“In the same vein, momentum for real estate investment trusts and artificial intelligence infrastructure is expected to increase as major technology companies invest in the region, which offers lower costs, reliable energy sources and geopolitical neutrality,” it added.
Local analysts had blamed lackluster market conditions for the lack of IPOs this year. The Philippine Stock Exchange index (PSEi) has been on a slump since closing at a near five-year high of 7,554.68 on October 7. On Tuesday, the PSEi closed at 6,803.19, up 0.61% from Monday’s close.
President and co-founder of Luna Securities, Inc. Francis Patrick T. Diaz said they have taken a wait-and-see approach when it comes to IPOs next year.
“Given our recent decline, we are more cautious. Apart from waiting for details on US policy, such as interest rates, keep in mind that next year is also an election year,” he said in a Viber message.
“Ultimately, it will be the economy and resulting market conditions that will set the pace for IPO activity. You can see how easy it is for potential companies to postpone their IPO plans when market conditions are not as optimistic as they expect,” he added.
Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said in a Viber message that rising market volatility since Donald J. Trump’s victory could push investors to stay on the sidelines.
“Increased volatility in global and local financial markets since Mr Trump won the US presidential election could realistically lead to a wait-and-see approach to some stock market fundraising deals as issuers seek shares at the highest prices and valuations to sell. as much as possible as a matter of financial prudence,” he said.
Mr Ricafort noted that Mr Trump’s protectionist policies and stricter immigration rules could fuel inflation in the US.
“There are also possible pro-US business and economic policies, such as tax cuts, which would lead to higher US inflation and could reduce the need for future Fed rate cuts, in turn boosting profits in financial markets, including the local stock market, could dampen. ”, he added.