19 Feb 2021
A number of Philippine companies may make the country the biggest IPO market in southeast Asia this year.
According to Refinitiv data, consumer retailers and real estate investment trusts (REITs) are setting up fundraisings that could exceed $4 billion in 2021, more than the combined amount of the last seven years.
Martin Siah, Southeast Asia head of corporate and investment banking at Bank of America Merrill Lynch stated: “We see a confluence of abundant liquidity, recovering macro fundamentals and relative valuation attractiveness contributing to the positive investor sentiment towards Southeast Asia IPOs.
“The strength in global capital markets has made it very attractive for quality Philippine issuers who have been timing their eventual IPOs.”
The largest local IPO is a $1.5 billion float by Monde Nissin, the firm behind the Quorn meat alternative, according to sources with knowledge of the matter, Reuters reports.
Other IPOs include two $500 million REITs, from conglomerate-owned SM Prime and Robinsons Land.
Vice president for investor relations of SM Prime commented: “It is really a question of when, not if. On the size, it depends on what the market can absorb.”
Issuers want to make the most of the plentiful market liquidity and tap investors before the 2022 presidential elections.
“Companies are willing to fund expansion. That is what we did not experience last year when a lot of them held back on expansion plans, borrowing and IPOs,” said Michael Gerard Enriquez, CIO of Sun Life of Canada (Philippines).
The economy plummeted by a record 9.5% in 2020, the worst contraction in southeast Asia last year as the Philippines imposed one of the strictest coronavirus lockdowns in the world.
However, the record $93.7 billion national budget is forecast to pump-prime the economy, which is set to expand by 6.5-7.5% in 2021, according to government officials.