Greece turmoil, weak US economy delay IPO bids

By Danessa O. Rivera

07/12/2010

Despite an upbeat mood in the business sector, companies considering an initial public offer (IPO) are delaying their plans as a result of weakened sentiment from financial meltdown in Greece and the persisten weak economuc of the United States but the Philippine Stock Exchange (PSE) said applications for public listings continue to pour in.

PSE chairman Hans Sicat said the bourse expects more IPO applications. “The one thing that we did not expect is the issue of Greece and the follow on effects of that and even the recent nervousness in the US has made them a little bit (shaky),” Sicat added.

He also said that companies planning to go public would naturally want to get a certain price multiple for their shares and this may not match the price bankers are willing to underwrite.

Meanwhile, the PSE continues to process pending applications for listing. Sicat, however, did not disclose the number and the names of the applicants prior to the approval of their respective listings. He disclosed, however, about five prospective stock offers in the pipeline.

The PSE was expecting at least six initial public offerings this year compared to one IPO for the whole of last year along with two follow-on offerings from firms that listed by way of introduction in 2009.

Expected IPOs are those that have been shelved until after the elections such as the P22.4 billion maiden offering of Gokongwei airline Cebu Air Inc. and the P2.2 billion to P3.9 billion IPO of real estate developer Globe Asiatique Realty Holdings Corp.

But Cebu Air president Lance Gokongwei had told reporters that the airline is not sure if it will undertake its IPO this year as current market conditions remain unfavorable.

This year, Agrinurture Inc. and Century Peak Metals Holdings Corp. are mandated to conduct follow-on offerings wherein Agrinurture had a May 25 deadline while Century Peak must sell new shares by Oct. 6.

Meanwhile, the PSE earlier partnered with ING Investment Management Philippines for a marketing campaign to boost participation in the stock market and launched a virtual stock trading competition dubbed “The 2010 ING-PSE Equity Challenge.”

Sicat said they welcome this partnership with ING Investment Management Philippines, which shares their vision in promoting financial and investment literacy programs among young Filipinos.

“Market education has been at the forefront of our strategic agenda and we hope to address the challenge of expanding and educating our investor base from different points,” Sicat said.

PSE chief operating officer Val Antonio Suarez added that through the combined forces of the PSE and ING Investment Management Philippines, the bourse is optimistic that the campaign, together with their market education initiatives, will encourage market participation.

ING Investment Management Philippines head and chief investment officer Paul Joseph Garcia said this is the first time the company is partnering with the Philippine Stock Exchange.

“I believe this partnership will be dynamic and will further boost our vision of educating the Philippine investing public on the value of properly investing their hard earned pesos,” Garcia said.

PSE vice president and head capital markets development division Enrico Trinidad said in terms of population, the Philippines only has less than half of one percent of the population participating in the stock market compared to other exchanges of emerging markets like Thailand and Indonesia, where the ratio is 30 percent.

The tournament, starting July 12 and ending on Oct. 15, targets students from major universities throughout Metro Manila and was conceptualized four years ago by ING Investment Management Philippines with the intention of educating the youth on the importance of investing in various instruments including the equities market.

Back to top

For comments about this website:Webmaster@tribune.net.ph
The Daily Tribune © 2006