Gaming, energy firms seen to lead IPOs in ’25

Professional services company Deloitte is cautiously optimistic about the initial public offerings (IPOs) at the Philippine Stock Exchange (PSE) for 2025, which could be led by the gaming and energy firms.

“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 look at what’s in the pipeline for the Philippines as well, there should be more IPOs happening in 2025 and in a mix of different industries.”

There could be IPOs from companies in the gaming, energy and resources sectors in 2025.

“There are two gaming companies, Okada Manila and Hann Resorts, and with a continued interest in energy and resources, we do think that there should be more IPOs coming for the Philippines,” Mr. Ng said.

The PSE previously said it expects to have six IPOs for 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 electronic wallet GCash, are said to be planning IPOs but with no definite timeline.

This year, there were only three IPOs, 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 energy and resources industry that raised USD 203 million, achieving market capitalization of USD 972 million,” Mr. Ng said.

A fourth IPO was initially scheduled 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 offer period of its maiden issuance to the first quarter of 2025 as the company accommodates institutional investors.

Based on Deloitte data, the Philippines is fourth among Southeast Asian countries in terms of IPO amount raised this year. Malaysia topped the region with USD 1.54 billion, followed by Thailand (USD 756 million), and Indonesia (USD 368 million).

The country is ahead of Vietnam (USD 37 million) and Singapore (USD 34 million).

“Southeast Asia’s strong consumer base, growing middle class, and strategic importance in sectors like real estate, healthcare, and renewable energy remain attractive to investors,” Deloitte said.

“On the same breadth, momentum for real estate investment trusts and artificial intelligence infrastructure are expected to pick up as large tech companies are investing into the region, which offers lower costs, reliable power source, and geopolitical neutrality,” it added.

Local analysts had blamed the 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 Oct. 7. On Tuesday, the PSEi closed at 6,803.19, up 0.61% from Monday’s close.

Luna Securities, Inc. President and Co-Founder Francis Patrick T. Diaz said they have adopted a “wait-and-see” stance when it comes to IPOs next year.

“Given our recent slide, we are more wait-and-see. Aside from waiting on specifics on United States policy such as interest rates, note that next year is also an election year,” he said in a Viber message.

“Ultimately, it will be the economy and consequent market conditions that will set the pace for IPO activity. You can see how easy it is for prospective companies to postpone their IPO plans if market conditions are not as bullish as they expect,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message rising volatility in markets since Donald J. Trump’s victory may prompt investors to stay on the sidelines.

“The increased volatility in the global and local financial markets since Mr. Trump won the US presidential elections could realistically lead to some wait-and-see attitude for some stock market fundraising deals as issuers would like to sell shares at the highest prices and valuations as much as possible as a matter of financial prudence,” he said.

Mr. Ricafort noted Mr. Trump’s protectionist policies and tougher immigration rules could stoke 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 that in turn could temper the gains in the financial markets, including the local stock market,” he added. –Revin Mikhael D. Ochave, Reporter