First Metro Investment Corp. (FMIC), the investment-banking unit of the Metrobank Group, said debt and equity fund-raising will remain active through 2012, led by infrastructure financing.
Justino Ocampo, FMIC senior vice president and investment banking group head, said in a briefing on Tuesday that high liquidity and low interest rates would continue to drive activity.
“All these ingredients are conducive for funding. In particular, for power generation,” Ocampo said. “We expect that infrastructure investments for equity and debt will take the forefront.”
“We are also expecting refinancing to persist. We see a number of conglomerates working on exercising prepayment options on financing to capitalize on lower interest rates and longer tenors,” he added.
Ocampo said mergers and acquisitions could also ramp up for specific sectors like consumer, health care and business-process outsourcing. Initial public offerings (IPOs), which have slowed down last year compared to 2009, may dip further this year amid concerns of lower valuations.
Still, Ocampo pointed out that FMIC is in talks with unnamed oil, gas and mining firms seeking to tap the equities market for the first time.
“For IPOs, it’s still a function of the need to raise capital,” he said.
Besides IPOs, follow-on offerings could lift the equities sector given the implementation of the Philippine Stock Exchange’s (PSE) minimum 10-percent public-ownership rule.
The PSE said there were about 41 firms, including FMIC, that have yet to comply with the rule as of September last year. These companies would need to widen their public ownership levels or face suspension and delisting by 2013.
FMIC President Roberto Dispo told reporters on Tuesday that the investment bank intends to comply with the PSE requirement within the year.
