The Philippine Stock Exchange Inc. said Wednesday first-quarter net income fell by 71 percent to P50.62 million from P175 million in the same period last year as the coronavirus pandemic slowed down trading activities and put several fund-raising plans on hold.
Operating revenues were flat at P295 million in the first quarter as trading-related fees decreased 1.2 percent.
“The COVID-19 pandemic definitely affected our revenues for the quarter. Investors opted to be liquid and hold on to cash, hence, the slowdown in trading activity particularly during the enhanced community quarantine period in Metro Manila and Luzon. Issuers also opted to put on hold fund-raising plans,” said PSE president and chief executive Ramon Monzon.
Monzon said while the bellwether Philippine Stock Exchange index slightly recovered from the steep decline in the first quarter, investors remained cautious about the market amid the uncertainties from the pandemic.
The PSEi reached an intra-day low of 4,039.15 on March 19 as the government imposed lockdown to prevent the spread of COVID-19 .Since then, the market has recovered and is currently trading above 6,000 level.
“In terms of trading, we noted brisk trading activity in June. We hope this will be sustained in the coming months. But overall, we think that investors will remain cautious as uncertainties from COVID-19 remain. They are also waiting for second quarter numbers of listed firms for a more concrete picture on how the pandemic impacted operations and consequently, revenues of companies,” Monzon said.
Monzon said meeting the target of P200 billion in fund-raising activities from the equity market would be challenging as most companies would likely reduce their capital expenditures and defer their expansion plans for the rest of the year to preserve cash and maintain liquidity.
“The only silver lining would be if banks become more strict and selective in their lending policy and listed companies who need funds have no choice but to raise the same from the equities market,” Monzon said.
The PSE is currently reviewing its listing rules to make fund-raising in the stock market even more accessible to companies.
The company is also looking at potential digital services that can be introduced as a response to the new business landscape.