The First Metro Investment Corp. on Wednesday ruled out the likelihood for companies looking to expand their horizon and raise capital funds via initial public offerings (IPO) at the Philippine Stock Exchange.
Daniel D. Camacho, FMIC executive vice president and group head for investment banking, said the realistic view is for the IPO to come back only next year.
“For the rest of 2023, I think the chances are slim. It’s July already and Christmas is close. So you only have until November (to do an IPO),” Camacho said at Wednesday’s mid-year economic briefing.
There had only been two IPOs this year which were the P1.6 billion Alternergy Holdings Corp. and the P1.7 billion listing of Upson International Corp. which owns several computer stores in the country.
Securities and Exchange Commission (SEC) director Vicente Graciano P. Felizmenio Jr. said the securities watchdog expects at least four more IPOs the rest of the year, most of which have previously postponed their listing plans due to unfavorable market conditions.
These include affordable housing developer Ovialand Inc. and Enrique K. Razon Jr.’s Prime Infrastructure Inc.
“We expect that during the second half they will push through with their IPO plans. They are just preparing for proper timing,” he said.
Cristina Ulang, FMIC’s head of research, said the benchmark PSEi may close between 7,300 to 7,500 points around year-end, with earnings-per-share growth of 13 to 15 percent and forward price to earnings (PE) ratio of 13.5 times to 14 times.
Ulang said these were almost the same targets set by the PSEi at the start of the year, but they introduced a lower band of 7,300 points.
“Because this is really a transition period, very difficult to forecast a lot of moving parts, a lot of ifs a lot and whens,” she said.
But FMIC said next year looks a promising landscape with the return of IPOs and real estate investment trusts offering investment opportunities.
“The second half of the year presents a favorable buying opportunity and accumulating assets in preparation for a significant recovery towards year-end and the first quarter of the following year,” FMIC said.
