PSE seen to miss IPO target

By Revin Mikhael D. Ochave, Reporter

THE PHILIPPINE Stock Exchange (PSE) will likely miss its target of six initial public offerings (IPOs) this year, as analysts expect better market conditions in 2025.

“This year, definitely there’s not enough time remaining for the PSE to reach its target of 6 IPOs,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia told BusinessWorld in a Viber message.

So far this year, there have only been three IPOs, namely, gold and copper mining company OceanaGold (Philippines), Inc., renewable energy companies Citicore Renewable Energy Corp., and NexGen Energy Corp.

The Securities and Exchange Commission has cleared the P2.87-billion IPO of Top Line Business Development Corp. The Cebu-based fuel retailer is planning to go public in November.

“Given the trend so far, it appears unlikely that any major IPO will occur before the end of 2024. However, this cannot be completely ruled out, as smaller-scale listings may still emerge unexpectedly,” Globalinks Securities and Stocks, Inc. Trader Mark V. Santarina said in a Viber message.

Mr. Santarina said the window for companies to prepare and launch an IPO this year is shrinking.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said more equity deals are expected in 2025 amid the current bullishness in the stock market.

“If we sustain the momentum into 2025, then we should anticipate more equity deals — IPOs, follow-on offerings, and stock rights offerings — next year,” Mr. Colet said in a Viber message.

Mr. Colet said there could be six IPOs in 2025, with candidates coming from the gaming, renewable energy, infrastructure, consumer, and real estate investment trust (REIT) sectors.

“If the stock market stays strong till next year, and economic conditions really improve next year, conditions will be more conducive for IPOs,” COL Financial Group, Inc. Chief Equity Strategist April Lynn C. Lee-Tan said in a Viber message.

The PSE index surged past the 7,500 level on Oct. 7, posting its best finish since January 2020. Investor sentiment has been improving amid expectations of further easing by the Philippine central bank.

The Bangko Sentral ng Pilipinas (BSP) began its easing cycle with a 25-basis-point cut at its Aug. 15 meeting, bringing the key rate to 6.25% from a 17-year high of 6.5%.

Meanwhile, Mr. Garcia said he expects a minimum of four IPOs next year, but his optimistic forecast is six to seven IPOs.

“For next year, we’re hoping that Razon’s Prime Infrastructure Capital, Inc. (Prime Infra) will finally push through with its massive IPO. Other than that, we’re seeing more consumer-centric IPOs like restaurants, retail and gaming,” he said.

Mr. Santarina said the outlook for IPOs is more promising next year amid the improving macroeconomic environment.

“With the PSE looking into new rules for Global Philippine Depositary Receipts (GPDR) and an improving macroeconomic environment, 2025 could see a return of IPO activity. This would be in line with broader market recovery expectations and companies waiting for a more favorable investment climate,” he said.

The PSE recently issued the draft guidelines for the GPDR, which refers to peso-denominated instruments representing economic interest in an underlying security listed on an overseas stock exchange.

The market operator said that GPDR’s introduction to the local bourse will allow for cross-border trading in the PSE and will enable investors to diversify their portfolio and hold foreign securities without having to directly trade in overseas markets.

Mr. Santarina said he expects several big names to go public next year.

“In 2025, GCash, Prime Infra, and SM Prime Holdings, Inc.’s REIT could lead major IPOs in the Philippines. GCash may go public, leveraging its large user base and financial tech services. Prime Infra might list to support its sustainable infrastructure projects, while SM Prime could offer another REIT, capitalizing on its extensive real estate assets for income-seeking investors,” he said.

SM Prime has deferred its planned REIT IPO, while Razon-led Prime Infra also postponed its first share sale, citing lackluster market conditions.

GCash is still waiting for the right market conditions to conduct an IPO at the local bourse but has floated the possibility of an overseas listing as well.