Connect with us

Hi, what are you looking for?

Economy

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

MANILA/SINGAPORE – 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.

“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 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. — Reuters

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

The national pig herd has lost-one tenth of all sows over the last six months, farmers’ associations have revealed, after breeders were forced into...

Investing

EasyJet plunged £213 million into the red in the Christmas quarter and is still burning through £150 million in cash each month, putting its...

Investing

A new range of healthy yet indulgent cookies will launch in Booths this month for just £1 per pack with the UK-born snacks by...

Investing

Payments firm Checkout.com has raised $1bn (£730m), giving it a $40bn (£29bn) valuation and crowning it the UK’s most valuable private fintech. The London-headquartered...

Investing

Sylvera, a UK-based startup that provides ratings for carbon offsets, has raised $32.6m (£24.1m) in a Series A funding round to accelerate and expand...

Investing

UK-based fintech Everything has raised €2m (£1.67m) to reinvent a decades-old financial product: premium bonds. The raise was led by a group of angel...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.