MANILA, Philippines — The Philippine Stock Exchange (PSE), operator of the local bourse, expects to see a better stock market performance this year, along with the government’s announced plan for economic recovery.
“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, prompting a strong rebound in corporate earnings and thus allow the economy to take off,” PSE president Ramon Monzon said.
While the new COVID-19 strain brings along new threats to growth prospects, Monzon said the economy is still poised for a recovery this year on the back of growth in OFW cash remittances, record-high dollar reserves, strong Philippine peso and a resilient property market.
Last year, despite the challenging environment, capital raised through the local bourse reached 104 billion, 2.9 percent higher than the 101 billion figure in 2019.
Of the amount, 44.3 billion was raised from initial public offerings; 41.2 billion from follow-on public offerings; P12.8 billion from stock rights offerings and 5.6 billion from private placements.
For 2021, Monzon expects capital raising to continue.
“Although the current economic environment remains fragile because of the unpredictability of the COVID-19 situation, we choose to be optimistic,” he said.
The PSE is targeting three IPOs and four REITs or real estate investment trust listings.
“We are confident companies will be enticed to list given the revised listing rules for REITs, and even more once we receive the Securities and Exchange Commission’s approval on our proposed amendments to the Main and SME Board listing rules,” Monzon said.
DDMP REIT Inc. for one has filed an application for a REIT IPO consisting of DoubleDragon Properties Corp.’s seven buildings in its leasable properties in DD Meridian Park in Pasay City.
DDMP REIT is looking to issue 6.536 billion secondary shares at P2.25 a piece for a total IPO offering of P14.71 billion.
The company is targeting to list on Feb. 26.
In all, the PSE expects companies to return to the stock market as the local economy recovers from the impact of this pandemic.
For the PSEi level for this year, Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp., gave a forecast of 7,500 to 8,000.
This is taking into account near record low bond yields and excess market liquidity as a result of quantitative easing.
This would also bank on the deployment of COVID-19 vaccines to help reduce new COVID-19 local cases and justify additional measures to re-open the economy, Ricafort said.