PH sees lower maiden listings amid rising ASEAN volume

The local bourse has faced slower stock market listings during the first half of the year amid inflationary pressures and global influence, SGV & Co. said in a media release on Wednesday.

“The Philippines faced many headwinds at the start of the year. Inflation peaked at 6.1% in the first half of the year while global events continue to impact the local economy which countered the gains from strong domestic demand in 2023,” SGV Assurance Partner and Philippines EY Private Leader Kristopher S. Catalan said.

“Unsurprisingly, these, among other factors, influenced the number of IPOs (initial public offerings) the country had this year,” Mr. Catalan added.

Only three companies conducted their maiden offering, valued at USD 77.7 million, on the Philippine Stock Exchange (PSE), according to EY Global IPO Trends Q2 2023.

This was amid the rising volume of IPOs in the Association of Southeast Asian Nations (ASEAN) region, which saw a 26% increase year on year to 82 IPOs.

The PSE recorded eight IPOs during the January-to-June period last year — five were listed on the PSE’s main board while three joined the small, medium and emerging board.

In the first half of this year, only Alternergy Holdings Corp., Upson International Corp., and Repower Energy Development Corp. conducted their maiden listing.

Alternergy held its IPO in March, raising PHP 1.62 billion by offering 1.15 billion in primary common shares plus an over-allotment option of 115 million shares at PHP 1.28 apiece.

Upson raised PHP 1.5 billion by offering about 625 million common shares, with an over-allotment option of 62.5 million common shares, at PHP 2.40 apiece.

Repower, which listed last week, raised PHP 1.15 billion in its IPO of 200 million primary common shares, with an over-allotment option of up to 30 million shares, priced at P5 apiece.

Mr. Catalan said the IPO scene in the region “looks promising despite geopolitical uncertainties and stringent regulatory environments.”

He said some of the country’s regional peers led the way with listings of companies in green energy and technology sectors, which thrived during the pandemic and beyond.

In the region, Indonesia saw 45 listings in the six-month period with total proceeds of USD 2.2 billion.

“Boasting a vast population and robust economic growth, the country is propelled by its rich mineral reserves — vital for green energy production — and strategic privatization of state-owned enterprises,” the firm said.

This was followed by Malaysia with 16 IPOs, Thailand with 15 listings, and the Philippines and Singapore with three IPOs each.

“Companies that are planning for IPOs need to prepare early on to demonstrate a sustainable business model, adapt with agility to new technologies and AI (artificial intelligence) applications, and implement sound capital management policies and practices. There are still merits to a well-prepared game plan even [today].” Mr. Catalan said.

SGV & Co. is a member firm of Ernst & Young Global Ltd. It is one of the largest professional services firms in the Philippines. — Adrian H. Halili