PSE target of 14 IPOs in 2023 seen within reach

THE local bourse operator’s target of 14 initial public offerings (IPO) this year is possible as further economic reopening offers greater confidence in business expansions, analysts said.

“This is achievable since the economy has already reopened further towards greater normalcy,”  Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

On the first trading day of the year, the Philippine Stock Exchange (PSE) said it is targeting this year up to 14 IPOs, of which 11 are companies and real estate investment trusts that will list on the main board. The remaining three are expected to debut on the small, medium and emerging board.

Mr. Ricafort said the economy’s further reopening “makes companies and conglomerates more decisive on new investments and expansion plans that require various fund-raising activities such as through the stock or equity markets.”

He said improving market conditions encourages more companies and conglomerates to raise funding through the stock market.

“Also, further development of local capital markets encourages further diversification of funding sources and from a bigger roster of investors and the investing public,” he added.

AB Capital Securities, Inc. Vice-President Jovis L. Vistan is also optimistic that the PSE target could be achieved.

“I think it is possible. We are through the pandemic, global monetary policy shifted, and outlook and market sentiments for 2023 are better,” Mr. Vistan said in a Viber message.

“The Philippine economic outlook is [also] relatively better compared to the rest of the world. That could provide a little more appetite for risk this year,” he added.

In a press release on Tuesday, PSE President and Chief Executive Officer Ramon S. Monzon said: “We look forward to more listings, higher trading volumes, and enhanced partnerships in the industry that will help expand our product and service offerings.”

The stock market operator said it is expecting to raise P160 billion from capital raising activities, which will be started by the stock rights offering of Union Bank of the Philippines.

On Oct. 28, 2022, the bank’s board of directors approved the rights offering with the issuance amount increased to PHP 12 billion on Dec. 27, 2022. The offer price for the issuance will be from PHP 54.48 to PHP 58.38 per right share with the company issuing up to 220.26 million shares.

The start of the offer period is set on Jan. 16 and will end on Jan. 27, according to the bank’s disclosure. Proceeds from the offering will be used as a capital infusion to UnionDigital, loan availments, and other growth opportunities.

On the stock market on Wednesday, the benchmark PSE index closed 2.01% or 132.49 points higher to 6,718.50. — Justine Irish D. Tabile