Funds raised from the bond and equities markets are expected to increase seven percent this year to P773 billion from P724 billion in 2017 as companies finance their expansion plans, First Metro Investment Corp. said in a briefing Monday.
FMIC head of Investment Banking Group Jose Pacifico Marcelo said while capital raising activities in the first half of the year was down 11 percent to P327 billion, corporate bonds offerings were expected to accelerate in the second half of the year after the weak start.
Marcelo said equity issuances would hit P220 billion in 2018, up 79 percent from P138 billion in 2017, while bond floats both from corporate and government issues would likely reach P553 billion in 2018.
Marcelo said corporate bond issuances amounted to just P55 billion in the first half of the year. But he expects corporate bond offerings in the second half of the year to reach P190 billion.
“With inflation expected to taper off and as issuers gain comfort with high-interest rate environment, capital raising will stage a mild recovery in the second half of the year,” Marcelo said.
Marcelo, meanwhile, said he was not to keen on initial public offerings given the current market conditions.
So far, only one company, DM Wenceslao & Associates Inc., was listed with the Philippine Stock Exchange this year.
There are two pending IPOs, namely Del Monte Philippines Inc. and Cal-Comp Technology (Philippines) Inc.
The market is also waiting for the planned $3-billion follow on offering of San Miguel Food and Beverage Inc.
SMFB has indicated plans to push through with the follow-on offering before the end of the year pending regulatory approvals.
FMIC expects the Philippine Stock Exchange Index to rally back to 7,900 to 8,200 points.
FMIC vice president Cristina Ulang said as the economy remained strong, adding fiscal policy continued to support growth while corporate earnings would likely deliver a 10-percent growth.
From a peak of 9,058 last January, the PSEi dropped to as low as 6,986 in June as a result of higher oil prices, a global trade war, rising inflation and interest rates, and weak peso.