By Revin Mikhael D. Ochave, Reporter
PROFESSIONAL SERVICES firm Deloitte expresses cautious optimism regarding the initial public offerings (IPOs) at the Philippine Stock Exchange (PSE) for 2025, potentially led by the gaming and energy sectors.
“The key term is cautious optimism,” stated Darren Ng, Deloitte Singapore Transactions Accounting Support Partner, during a virtual briefing on Tuesday.
“From this viewpoint, if you examine what’s lined up for the Philippines, there should indeed be an increase in IPOs occurring in 2025 across various industries.”
There may be IPOs from entities within the gaming, energy, and resources sectors in 2025.
“Two gaming firms, Okada Manila and Hann Resorts, are in the picture, and with sustained interest in energy and resources, we believe that more IPOs should be forthcoming for the Philippines,” Mr. Ng remarked.
Previously, the PSE indicated it anticipates six IPOs for 2025.
Several prominent names, including SM Prime Holdings, Inc.’s real estate investment trust, Razon-led Prime Infrastructure Capital, Inc., Maynilad Water Services, Inc., and electronic wallet GCash, are purportedly planning IPOs but with no specific timetable.
This year, there were only three IPOs, not meeting the PSE’s objective of six. These consisted of mining company OceanaGold Philippines, Inc. and renewable energy firms Citicore Renewable Energy Corp. and NexGen Energy Corp.
“In the first three quarters of 2024, the PSE recorded three IPOs in the energy and resources sector, garnering $203 million, achieving a market capitalization of $972 million,” noted Mr. Ng.
A fourth IPO was originally planned for this year; however, Cebu-based fuel retailer Top Line Business Development Corp. (Topline) opted to defer it.
Topline declared on Monday that it will shift the offer period for its inaugural issuance to the first quarter of 2025 to accommodate institutional investors.
Deloitte’s data indicates that the Philippines ranks fourth among Southeast Asian nations concerning the amount raised through IPOs this year. Malaysia led the region with $1.54 billion, followed by Thailand ($756 million) and Indonesia ($368 million).
The country surpasses Vietnam ($37 million) and Singapore ($34 million).
“Southeast Asia’s robust consumer market, expanding middle class, and strategic significance in areas like real estate, healthcare, and renewable energy continue to attract investors,” stated Deloitte.
“Additionally, the momentum for real estate investment trusts and artificial intelligence infrastructure is expected to gain traction as large tech companies invest in the region, which provides lower costs, dependable power sources, and geopolitical neutrality,” it added.
Local analysts attributed the underwhelming market conditions to the scarcity of IPOs this year. The Philippine Stock Exchange index (PSEi) has experienced a downturn since it closed at a near five-year high of 7,554.68 on Oct. 7. As of Tuesday, the PSEi closed at 6,803.19, reflecting a 0.61% increase from Monday’s close.
Luna Securities, Inc. President and Co-Founder Francis Patrick T. Diaz mentioned that they have adopted a “wait-and-see” approach regarding IPOs for the upcoming year.
“Given our recent decline, we are leaning more toward a wait-and-see approach. Apart from awaiting specifics on U.S. policies, such as interest rates, it’s noteworthy that next year is also an election year,” he added in a Viber message.
“Ultimately, it will be the economy and the resulting market conditions that will dictate the pace of IPO activity. It’s evident how effortlessly prospective companies can postpone their IPO strategies if market conditions are not as favorable as anticipated,” he further elaborated.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort stated in a Viber message that the rising volatility in markets since Donald J. Trump’s election victory might compel investors to remain on the sidelines.
“The increased volatility in the global and local financial markets since Mr. Trump’s electoral win could realistically engender a wait-and-see stance for some stock market fundraising initiatives, as issuers would prefer to sell shares at the highest possible prices and valuations out of financial prudence,” he remarked.
Mr. Ricafort observed that Mr. Trump’s protectionist policies and stricter immigration regulations could exacerbate inflation concerns in the U.S.
“There are also potential pro-U.S. business and economic policies such as tax reductions that could result in heightened inflation in the U.S. and could decrease the likelihood of future Fed rate cuts, subsequently tempering the gains in financial markets, including the local stock market,” he continued.
