PSE targets 3 IPOs, 4 Reits

AMID the gloomy global economic landscape that is largely threatened by the coronavirus pandemic, the country’s local bourse remains optimistic about the market recovery and economic rebound taking place this year.

For 2021, the Philippine Stock Exchange targets to welcome three initial public offerings (IPO) and four real estate investment trusts (Reit).

“We are confident companies will be enticed to list given the revised listing rules for Reits, and even more once we receive the Securities and Exchange Commission (SEC) approval on our proposed amendments to the Main and SME Board listing rules. We expect companies to return to the stock market as the local economy recovers from the impact of this pandemic,” said Ramon Monzon, PSE president and chief executive officer, in a statement.

DDMP Reit Inc. has filed an application for a Reit IPO consisting of DoubleDragon Properties Corp.’s seven buildings in its leasable properties in DD Meridian Park. DDMP Reit is looking to issue 6,536,737,316 secondary shares at P2.25 a piece for a total IPO offering of P14.71 billion. Listing date is scheduled at Feb. 26, 2021.

Areit Inc. is the first Reit to be listed in the PSE. Ayala Land Inc. serves as the sponsor of Areit.

Reit is a corporation that primarily invests in income-generating real estate such as office spaces, shopping malls, service apartments and even hotels, hospitals and warehouses. It gives investors an opportunity to invest directly in the finished projects rather than the developer itself. This is meant to attract dividend-seeking investors because the Reit law requires the distribution of at least 90 percent of income as dividends annually.

2021 outlook

Moreover, the PSE is looking forward to a better market performance this year.

Monzon said the government’s plan to start local mass inoculation to fight Covid-19 starting the second half of 2021 would enable the lifting of all restrictions, allowing a strong rebound in corporate earnings.

But the local bourse is also cautiously optimistic because the discovery of a new Covid-19 strain in the United Kingdom and the United States might dampen investors’ sentiment again.

“We take comfort from the statements made by our economic managers that the Philippine economy is poised for a recovery next year on the back of growth in overseas Filipino workers’ cash remittances, record-high dollar reserves, strong Philippine peso and a resilient property market. However, we must admit that restoring the confidence of investors will continue to be a challenge,” said Monzon.

Despite the pandemic, the total amount raised in the PSE (both primary and secondary shares) in 2020 was P104 billion, 2.9 percent higher than the P101 billion figure in 2019.

Of the total amount raised, some P44.3 billion was from IPOs (primary and secondary shares); P41.2 billion from follow-on public offerings; P5.6 billion from private placements; and P12.8 billion from stock rights offerings. (KOC)


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