Capital markets may miss fund-raising goal

MANILA, Philippines — The country’s capital market platforms are at risk of missing their fund raising targets this year because of the bearish mood in the stock market and rising interest rates.

Both the Philippine Stock Exchange (PSE), the operator of the local bourse, and the Philippine Dealing & Exchange Corp. (PDS Group), the operator of the fixed income exchange, said they might miss their capital raising targets because of the volatile environment.

But officials from both exchanges are still keeping their fingers crossed that the situation would improve in the last quarter of the year.

In an interview with The STAR,

Philippine Stock Exchange chief operating officer Roel Refran said companies have put off their planned share sale activities, including initial public offerings (IPOs).

“They backed out because of what’s happening,” Refran said.

He cited for instance Cal-Comp Technology (Philippines) Inc., a technology firm that is part of Taiwanese conglomerate New Kinpo Group.

Cal-Comp decided to defer its P6.77 billion IPO slated in the second half of the year because of the current bearish sentiment in the market.

Before this, Campos family-owned Del Monte Philippines Inc. (DMPI) also decided to postpone its planned IPO, originally planned for last June.

The postponements have left D.M. Wenceslao & Associates Inc. as the lone company to brave the stock market so far this year, raising P8.1 billion last June.

The Philippine Stock Exchange index (PSEi), the stock market barometer, has been battered by heavy foreign selling for 31 straight days already as of last week.

On Thursday last week, global jitters sent the index sinking below the 6,800 or at a 52-week low of 6,790.58 before crawling back to close at 6,884.38.

The PSEi managed to return to the 7,000 mark on Friday, closing at 7,004.44, up 120.39 points or 1.75 percent.

Refran said despite the volatility, the PSE hopes to bring to P200 billion the amount of capital raised from the market this year – the same level in 2017.

In the first half, the amount raised from the stock market reached P150 billion. This consisted of stock rights offerings by PetroEnergy Resources Corp., Robinsons Land Corp., Integrated Micro-Electronics Inc., Metropolitan Bank and Trust Co., Bank of the Philippine Islands and the PSE, as well as the IPO of D.M. Wenceslao.

There were also private placements from several companies such as IRC Properties Inc., China Banking Corp., Basic Energy Corp. and Golden Bria Holdings Inc.

Despite the deferment of capital raising activities, Refran said the PSE has not given up on hitting the target.

“Hopefully, we can still meet it,” he said.

Over at the fixed-income exchange, the PDS Group is also still hoping to reach P207 billion worth of listings, the same level as last year.

Philippine Dealing & Exchange Corp. (Pdex) chief operating officer Antonino Nakpil said that by the end of October, capital raised by companies from the fixed income exchange would reach P170 billion.

“I hope we can still match the level last year,” Nakpil said in an interview.

He said that as long as the economy is still positive, the corporate sector would need to borrow.

“It’s possible to reach the same number as last year, but given the interest rates, some are cautious also,” Nakpil said.

The Bangko Sentral ng Pilipinas (BSP) has raised key policy rates by 150 basis points since May, among the most aggressive in Asia, as it struggles to quash rising prices of consumer goods and to arrest the continued weakening of the peso.