IPOs generate P45.39B in H1

Total equity raised from initial public offerings (IPOs) and additional share issuances hit P45.39 billion in the first half of the year, 78 percent higher than the P25.5 billion recorded the previous level as more and more companies tapped the capital market for their funding needs to take advantage of a booming stock market.

Based on data collated by the Philippine Stock Exchange (PSE), the bulk of the capital came from follow-on and stock rights offerings of companies followed by proceeds from IPOs and private placements.

There were four companies that undertook an additional share offering during the period under review, raising a combined P26.98 billion, compared with only P10.44 billion last year. These were Filinvest Land Inc. which generated P5.92 billion in proceeds, Rizal Commercial Banking Corp. (P5.67 billion) Union Bank of the Philippines (P5.04 billion), and Alliance Global Group Inc. (P10.35 billion).

Equity from stock rights offerings amounted to P15.4 billion, roughly 20 times the P751.96-million recorded a year earlier. These companies include Megaworld Corp. (P10.79 billion); EEI Corp. (P540 million); AGI (P3.11 billion); and Geograce Resources Philippines Inc. (P489.88 million).

Only two companies went public during the first half of the year, raising a combined P2.92 billion, down by 67.8 percent from the P9.09 billion level reported the previous year. The two new entrants to the PSE’s roster of stocks were National Reinsurance Corp. of the Philippines (P2.82-billion) and Pacific Online Systems Corp. (P104.78 million).

Proceeds from private placements also dropped to P80.47 million from P5.21 billion a year ago.

PSE president and chief executive officer Francis Lim expects equity raised from IPOs to dramatically grow in the second half with the big-ticket share issuances of Aboitiz Power Corp., Vista Land & Lifescapes Inc., and GMA Network.

“We in the PSE remain confident that total proceeds this year from various capital-raising sorties will hit a new all-time high, based on IPOs we have in the pipeline,” Lim said.

“Stock prices, as tracked by the PSEi, continue to scale new highs; so expect more companies to take advantage of this positive development to raise needed funds by selling their shares to the public,” Lim added.

According to PSE records, share prices started reaching new historic highs on May 18, 2007, when it closed at 3,449.18 points, wiping off the previous record high of 3,447.60-points set on Feb. 3, 1997 or more than 10 years earlier.

At the end of the first semester this year, the PSEi closed at 3,660.86 points or 22.7 percent higher than the PSEi’s level in 2006. The main index has continued to scale new highs at the start of the second semester. On July 5, it reached another all-time high of 3,791.42 points or 27.1 percent higher than its mark in 2006.