FUND-RAISING activities of companies via the capital markets may slightly increase this year, despite volatile market conditions. This is because a lot of cash are still in the market chasing so few securities, according to Justino Juan R. Ocampo, executive vice president of First Metro Investment Corp. (FMIC).
He said FMIC alone may facilitate three to five listings this year, mostly between P1 billion and P4 billion, with the first likely to be done as early as the first quarter.
“For this year, we are courting market leaders to list at the PSE [Philippine Stock Exchange]. In the fixed income, we anticipate many of them,” Ocampo said.
“We expect to be hectic in the first half for the fixed income. The market is very liquid,” he said, adding it may handle at least three during the period.
The owner of retail chain Wilcon Depot, which sells home items and other construction supplies, already filed its application for an initial public offering (IPO), hoping to raise as much as P7.9 billion.
According to the company’s prospectus filed with the Securities and Exchange Commission, Wilcon Depot Inc. intends to sell around 1.39 billion primary shares at P5.68 per share.
The final offer price shall be determined prior to the scheduled listing on March 2017, it said.
Audio Wav Media Inc. also filed for its IPO, also slated for the first quarter of the year, hoping to raise between P1.4 billion and P2.4 billion.
Absent from the IPO scene, meanwhile, were the Espiritu family’s Datem Inc. and DM Wenceslao and Associates Inc.. Both are in the construction business and in need of huge capital, but deferred their respective IPO last year.
Ocampo said there are also other firms from countries, such as South Korea, Japan and Taiwan, that are interested to buy into local companies.
He declined to name them.
He, however, said Asian investors are interested in food manufacturing, construction and the fast-moving consumer-goods segment.
“We’re hoping to close one in the first half. The size is not too big,” he said.
Last year the PSE only raised P177 billion worth of capital from primary offerings, down from the previous year’s P185 billion.
FMIC said the PSE index is seen to crawl back to 7,500 within the year—from last year’s close of 6,840.64 points—on strong Philippine fundamentals.
Investment banks also see listed companies’ earnings growing 10 percent for the year and investors giving the Philippine stock market a valuation of 17 times price-to-earnings ratio.
Cristina Ulang, FMIC head of research, said catalysts for the market’s uptick is the potential for the economic growth to outperform, the government’s fiscal ramp-up delivering and higher corporate earnings.
Among the companies First Metro favors under current market conditions include Metro Pacific Investments Corp., Aboitiz Equity Ventures Inc., SM Investments Corp., GT Capital Holdings Inc., Puregold Price Club Inc., Robinsons Retail Holdings Inc., D&L Industries Inc., Centuries Pacific Food Inc., Metropolitan Bank and Trust Co., Security Bank Corp., Robinsons Land Corp., Ayala Land Inc. and Aboitiz Power Corp.
Image credits: Nonie Reyes