PSE sees major stock offerings in 2021

The Philippine Stock Exchange is cautiously optimistic that the local stock market will perform better in 2021 and expects at least 10 companies to raise funds via the bourse through public offerings of stocks.

“For 2021, we look forward to a better market performance on expectations that confidence in our economic recovery will gradually return,” said PSE President Ramon S. Monzon.

Shown at the last day of trading for 2020 are (from left): PSE Finance Division Head Roberto Jose R. Jimenez and Securities Clearing Corporation of the Philippines COO Renee D. Rubio; PSE COO Roel A. Refran and PSE President and CEO Ramon S. Monzon.

He noted that, “The government’s announced plan to start local mass inoculation to fight COVID-19 starting the second half of 2021 would enable the lifting of all restrictions, prompt a strong rebound in corporate earnings and thus allow the economy to take off.”

However, Monzon said “the discovery of a new COVID-19 strain in the United Kingdom and the United States might put a dampener on investor sentiment again and that is why we are cautiously optimistic.” 

He added that, “We take comfort from the statements made by our economic managers that the Philippine economy is poised for a recovery next year on the back of growth in OFW cash remittances, record-high dollar reserves, strong Philippine peso and a resilient property market. However, we must admit that restoring the confidence of investors will continue to be a challenge.”

While the current economic environment remains fragile because of the unpredictability of the COVID-19 situation, Monzon said, “We choose to be optimistic and so are targeting three IPOs (initial public offerings) and four REITs (real estate investment trusts).” 

The PSE expects companies to return to the stock market as the local economy recovers from the impact of the pandemic and is confident companies will be enticed to list given the revised listing rules for REITs and if the SEC approves the PSE’s proposed amendments to its Main and SME Board listing rules.

Aside from the IPOs and REITs, Monzon said, “We have a number of follow-on and stock rights offerings in the pipeline which include US$20 million and US$250 million DDS (dollar denominated securities) offerings of Cirtek and Cebu Air; and the P5 billion stock rights offering by AC Energy.”

The PSE is also looking forward to the implementation of short selling as well as the introduction of new sector and thematic indices such as mid-cap and high dividend yield.

“Hopefully, these new indices will entice the creation of new index-linked funds,” he said.