5 IPOs likely seen this year
‘We see an all-out election spending on a local and national scale as we move closer to the May midterm elections. This, coupled with easing inflation, will boost household spending and ultimately favor the economy’s growth this year’
Unicapital Securities Inc. (USI), the brokerage arm of investment house Unicapital Group, expects three to five initial public offerings (IPOs) this year despite lingering market challenges.
USI head of Research Wendy Estacio-Cruz said in a media briefing on Thursday that potential listings may come from the utilities, telecommunications, and financial sectors, including mobile wallet giant GCash.
“Some of them are optimistic despite the current market condition, but they will push with the IPO. Perhaps (there might be) three to five IPOs on the conservative side,” Estacio-Cruz said.
She also noted that discussions on the 20 percent minimum public ownership requirement for IPOs could impact foreign investor participation, particularly for companies planning larger fundraising activities.
“If it’s purely local, it may not be as easy. But if foreign investors come in, which I think they will, that may help support the market,” she said.
P120-B IPO proceeds
The Philippine Stock Exchange (PSE) had initially targeted P120 billion in IPO proceeds last year but raised only about P80 billion. While it aimed for six IPOs in 2024, only three firms — OceanaGold (Philippines) Inc., Citicore Renewable Energy Corp., and NexGen Energy Corp. — pushed through with their listings.
The PSE attributed the delays to economic and geopolitical uncertainties that prompted several listing applicants to defer their offerings.
Overall, USI expects the Philippines to remain one of Southeast Asia’s fastest-growing economies despite economic challenges and uncertainties from the new United States administration.
Election-related spending is also expected to drive short-term gains in the stock market, particularly benefiting the consumer, construction, infrastructure, media and telecommunications sectors.
Consumer companies typically see a 5 to 10 percent revenue increase during this period due to higher demand.
“We see an all-out election spending on a local and national scale as we move closer to the May midterm elections. This, coupled with easing inflation, will boost household spending and ultimately favor the economy’s growth this year,” Estacio-Cruz said.