Philippines ranks 4th in Southeast Asia for IPO proceeds in first half

The Philippine Stock Exchange (PSE) ranked fourth in Southeast Asia for proceeds generated from initial public offerings (IPOs) in the first half of the year, according to a report by multinational professional services network Deloitte.

“Despite only having two new listings during the first half of 2024, the Philippines’ capital market had once again clinched the fourth spot in the region, with both new entrants securing positions in the Top 10 IPOs of 2024 H1,” Deloitte said in its Southeast Asia Mid-Year IPO Snapshot 2024 report.

“The energy and resources industry remains a strong sector for the country’s capital market,” it added.

During the first half, the PSE saw the public listings of OceanaGold Philippines, Inc., a gold and copper mining company, and Citicore Renewable Energy Corp., a renewable energy company. These IPOs were the second and fifth largest in the region, respectively.

The Philippines accounted for 14% or USD 194 million of the total IPO proceeds raised by Southeast Asian countries, higher than Vietnam’s 3% or USD 37 million and Singapore’s 1% or USD 20 million.

However, the Philippines trailed countries such as Malaysia, which accounted for 33% or USD 450 million of all IPO proceeds raised, as well as Thailand with 31% or USD 427 million, and Indonesia with 18% or USD 248 million.

For the first half, Deloitte noted that the Southeast Asia IPO market had 67 IPOs, down by 21% from the 85 IPOs last year.

The region also saw a 59% drop in IPO proceeds to USD 1.4 billion, and a 71% decline in IPO market capitalization to USD 5.8 billion.

“Despite a positive growth outlook and increasing foreign direct investment in Southeast Asia, the prolonged geopolitical instability and high interest rates environment have significantly impacted market conditions and investor sentiment in Southeast Asia, leading to a lukewarm record of IPOs in 2024 H1,” Deloitte Southeast Asia Accounting & Reporting Assurance Leader Tay Hwee Ling said.

“The ongoing inflation concerns and efforts to stabilize the global economy suggest that the high interest rate environment could persist into 2024,” she added.

Meanwhile, Ms. Hwee Ling is cautiously optimistic that Southeast Asia’s IPO market will improve beyond 2024, despite being subdued so far.

“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 complexities of geopolitical tensions and the global economic landscape. Looking further ahead, the potential for interest rates to decrease could spur the return of real estate investment trust listings in the region,” she said.

“Additionally, many artificial intelligence (AI) and AI-associated businesses are still in the early seeding stages within the private domain. We anticipate a significant wave of AI IPOs tapping into the IPO capital markets in the coming years, bringing innovation and new opportunities to the market,” she added.

The PSE also saw the public listing of NexGen Energy Corp. in July, nearing the market operator’s target of six IPOs this year. — Revin Mikhael D. Ochave