The Philippine Stock Exchange says its target for record share sales this year is still achievable as at least three “big names” are planning initial public offerings (IPOs) amid rising volatility and after a market rout last month.
The bourse is sticking to its previous forecast that share sales this year may exceed last year’s record of 219.07 billion Philippine pesos (US$5.05 billion), Philippine Stock Exchange President Hans Sicat said in an interview yesterday in Manila.
Philippine companies have raised 31.12 billion pesos in the year through Friday from IPOs and secondary share sales, 66 percent less than in the same period last year, stock exchange data show.
The benchmark Philippine Stock Exchange Index fell into a bear market last month, sending valuations to a seven-month low and volatility to the highest in more than four years, as international investors sold emerging market assets amid speculation that the US will cut monetary stimulus.
Overseas funds sold a net US$241 million of Philippine stocks last month, the biggest monthly outflow since December 2008.
“There are another three to four big names in the IPO pipeline,” other than Travellers International Hotel Group and Robinsons Retail Holdings Inc, Sicat, 52, said before the start of a conference in Manila.
“We need three to four of the bigger deals to catch up with the target,” he said, declining to name the companies or the sizes of their planned share sales.
Casino operator Travellers has reportedly delayed a planned IPO, while Robinsons Retail indicated it will wait for better market conditions.
The Philippine Stock Exchange Index slumped 7.9 percent last month after US Federal Reserve Chairman Ben Bernanke on May 22 said the US central bank could consider curbing its bond-purchase program should the US economy show more signs of improvement.
The gauge’s 30-day historical volatility rose to 45 on Monday last week, the highest level since December 2008, when the collapse of Lehman Brothers Holdings Inc fueled a global equities rout.
“We aren’t changing anything even with the volatility we have seen recently,” Sicat said. “Valuations remain attractive and the level of interest from issuers remains high. If the deals that we are supposed to see happen then we will make it.”
Sicat said that while the market will remain volatile over the short term, the degree will probably be less than that seen in the past two weeks, as investors have gone through the initial shock from the prospect of tapering US stimulus.
“The market will continue to be volatile for the simple reason that US market data and their interpretations tend to be confusing,” he said. “The eurozone also has its own issues and closer to home there are questions over Japan and China.”
While it might be a “bit optimistic” to expect valuations to return to a peak later this year this could still happen, as the IPOs of “large” companies may sustain investors’ interest in the nation’s equities, Sicat said.