Prospects of rising liquidity and improving market prices are overshadowing concerns about global geopolitical risks, especially the potential for escalating conflict in the Middle East.
Rosier conditions could pave the way for the postponed $1 billion listing of SM Prime Holdings’ shopping malls under a real estate investment trust (REIT), Eduardo Francisco, president of BDO Capital & Investment Corp., told InsiderPH.
“Maybe the later part of the year for REITs in general, so rates would have been cut by around 150 basis points,” Francisco said.
Last month, the BSP cut the key interest rate by 25 basis points, the first reduction of its kind in four years. After that, it raised the limit on how much banks can lend out in further efforts to stimulate economic growth.
“[We’re] very positive and optimistic for 2025,” Francisco said. “Everything is getting better, but the risk of a Middle East war breaking out remains.”
More IPOs next year
Philippine Stock Exchange president Ramon Monzon said 2025 looks more promising for IPOs and equity deals as 2024 nears its end.
“It’s almost October so might be late already for a company to try to complete their IPO requirements before the end of the year. Looking forward to more and bigger IPOs next year,” he said in a text message.
There were three IPOs in 2024: OceanaGold Philippines (P6 billion) and tycoon Edgar Saavedra’s Citicore Renewable Energy (P5.3 billion), and NexGen Energy Corp. (P504 million).
4th IPO candidate still in the race
Cebu-based fuel retailer Top Line Business Development is also aiming to raise as much as P3.2 billion via a stock market listing in November.
“For the IPO, we are currently securing regulatory approvals. We’re still on track for our November listing,” Eugene Erik C. Lapasaran Lim, Top Line chair, president and CEO, said in a text message.
Bullish market will spur interest in other share offers
Better market prices could put the spotlight on other equity deals, said Juan Paolo Colet, managing director at China Bank Capital Corp.
“The stock market’s bullish tone has already gotten the attention of potential IPO, [follow-on offers], and even [stock rights offer] candidates. As market valuations, trading volumes, and fund flows continue to improve, we expect more and much larger equity deals next year,” he said.
Watch the 7,500 for the PSEi
“Timing is key for clients. There are those who think a breakout above the post-pandemic high of around 7,500 would be the best time to launch an offering, while there are others who are weighing whether to do a deal before or after the midterm elections,” Colet said.
“Overall, however, they are optimistic that 2025 could be a viable window for equity offerings,” he added.
Be wary of risks
Jonathan Ravelas, veteran forecaster and senior adviser at Reyes Tacandong & Co., explained that the 7,500 level remains a key resistance point, representing a price barrier where selling pressure tends to prevent further upward movement.
“Right now, we’re still optimistic about interest rate cuts but we still have to see the outcome of the US elections and whether the Middle East crisis escalates,” he said in an interview.
The spread of conflict in the Middle East could affect the large population of migrant Filipino workers, impacting remittances and local spending.
“Slower remittances won’t be good if 70 percent of the economy relies on consumer spending,” Ravelas said.
Bullish trend intact
The PSE Index entered bull market territory earlier this week as the benchmark measure rallied above 7,400.
The PSEi continued gains on Thursday with a 1.31 percent increase to 7,458.74. This brought gains since the start of the year to about 15 percent.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
