Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Philippines set to take rare, top spot for IPOs in Southeast Asia

Stock MarketsFeb 19, 2021 12:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Financial district amid coronavirus outbreak in Manila

By Neil Jerome Morales and Anshuman Daga

MANILA/SINGAPORE (Reuters) - A clutch of Philippine firms, including newly launched real estate investment trusts (REITs), could make the country Southeast Asia's biggest IPO market this year, driven by attractive valuations and a recovering economy.

Investors and bankers say consumer retailers and REITs are lining up record fundraisings that could top $4 billion in 2021, more than the combined tally of the last seven years, according to Refinitiv data.

Across the rest of the region, only a $2 billion Singapore IPO by a subsidiary of Thai Beverage, smaller floats in Indonesia and insurance IPOs in Thailand, are among those lining up for launches this year.

"We see a confluence of abundant liquidity, recovering macro fundamentals and relative valuation attractiveness contributing to the positive investor sentiment towards Southeast Asia IPOs," said Martin Siah, Southeast Asia head of corporate and investment banking at Bank of America Merrill Lynch (NYSE:BAC).

"The strength in global capital markets has made it very attractive for quality Philippine issuers who have been timing their eventual IPOs."

A $1.5 billion float by Singapore sovereign fund GIC-backed Monde Nissin, the company behind the iconic local instant noodle brand Lucky Me! and meat alternative Quorn, is set to be the biggest local IPO, sources familiar with the matter said.

Others include two $500 million REITs, from conglomerate-owned SM Prime and Robinsons Land, sources said.

"It is really a question of when, not if. On the size, it depends on what the market can absorb," Alex Pomento, vice president for investor relations of SM Prime, told Reuters.

A long-pending $1.5 billion IPO from National Grid (LON:NG) Corp of the Philippines (NGCP) to comply with regulatory requirements is also expected, though sources said the process could be pushed to next year.

Robinsons Land did not respond to a request for comment. NGCP declined to comment while calls to Monde Nissin were unanswered.

Issuers are keen to take advantage of the abundant market liquidity and tap investors before next year's presidential elections that could create market volatility.

"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 slumped by a record 9.5% last year, the worst contraction in Southeast Asia for 2020, as Philippines enforced one of the world's longest and strictest pandemic-induced lockdowns.

The government's record $93.7 billion national budget is expected to pump-prime the economy, which is targeted to grow by 6.5-7.5% this year, government officials say.

A strong performance of IPOs launched last year is also supporting new issues despite the broader market falling 9% last year.

"I assume these will be well-received. They will be a play on high growth and consumption and economic dividends," said Eduardo Francisco, president of BDO Capital and Investment Corp, referring to potential IPOs of Monde Nissin and NGCP.

This year, about four property units are set to launch REITs, an emerging asset class, after new rules announced last year allowed lower public floats and tax breaks for REITs, which typically pay higher dividends to investors.

"Given the attractiveness of REITs as an investment and the robust real estate market fundamentals in the Philippines, we are expecting to see more REIT IPOs come to the market," said BofA's Siah.

Philippines set to take rare, top spot for IPOs in Southeast Asia
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email