Voluntary delistings and sluggish trading activity defined the Philippine equities market in 2023, with four major companies opting to leave the bourse and investors remaining cautious amid global uncertainties.
Eagle Cement Corp., logistics firm 2GO Group Inc., infrastructure conglomerate Metro Pacific Investments Corp. and cement producer Holcim Philippines Inc. delisted this year, citing various reasons. While Eagle Cement and 2GO’s exits were relatively smooth, Metro Pacific and Holcim faced resistance from minority shareholders.
Metro Pacific’s initial offer price of P4.63 per share drew discontent, nearly jeopardizing the delisting. The offer was eventually raised to P5.20 per share, securing shareholder approval. In Holcim’s case, small investors found the tender offer process cumbersome due to the company’s prior suspension from trading for not meeting minimum public ownership requirements.
Philippine Stock Exchange (PSE) president Ramon Monzon downplayed concerns about the delisting trend, emphasizing the freed-up capital for potential reinvestment. However, he acknowledged the challenge of low trading volume, with October’s average daily value turnover plunging 37.6 percent year-on-year. To address this, the PSE is exploring various initiatives.
Proposal to boost trading
“We are proposing to lower the tax on stock transactions from 0.6 percent to 0.1 percent to encourage broader participation,” Monzon said. Attracting more initial public offerings (IPOs) is another priority, with the PSE aiming to simplify listing rules for small and medium enterprises and expand its product offerings to enhance liquidity.
Bullish for 2024
Monzon expressed optimism for 2024, as he expects at least four IPOs with anxieties about rising interest rates and inflation beginning to subside.
Companies that postponed listing plans in 2023 are likely to revisit them when market conditions improve, he said. Among the potential IPOs next year are SM Prime Holdings’ REIT firm, miner OceanaGold Philippines Inc., Prime Infrastructure Capital Inc. of businessman Enrique Razon Jr. and Megawide’s Citicore Renewable Energy Corp.