Phl stock market showing signs of recovery – Sicat

MANILA, Philippines - The Philippine stock market has shown signs of recovery year-to-date, differentiating itself from regional peers as the country’s strong economic and corporate growth prospects remain intact.

Capital to be raised from the local bourse is seen to hit P200 billion this year due to corporate expansion plans and initial public offerings (IPO), the top official of the Philippine Stock Exchange (PSE) said.

“The view on the Philippines continues to be strong and that’s one thing that differentiates us among Asean countries,” PSE president and CEO Hans B. Sicat said late last week.

“When you look at fundamentals, the general stuff about the economy and all the corporate governance stuff that we’re doing, it’s resonating with investors,” Sicat said.

Despite the emerging market selloff early this year, the local bourse managed to stay afloat with a year-to-date gain of 9.7 percent, making it the second best performing stock exchange, next only to Vietnam’s 16-percent improvement.

PSEi’s uptick is better than that of benchmark indices in Indonesia (8.6 percent), Thailand (4.4 percent) and India (3.4 percent).

Bellwether indices in Hong Kong, Japan and Malaysia are in the red year-to-date.

Sicat said foreign investors are returning to the local bourse given the discernment on the Philippines’ macroeconomic prospects.

Average value turnover rose to P8.45 billion as of mid-March from P7.25 billion in February and P5.85 billion in January, PSE data showed. However, average daily turnover this month was significantly lower at P7.05 billion from P20.22 billion a year ago when the PSEi surged to unprecedented highs.

“What this shows is market liquidity seems to be returning and I think that’s a healthy sign,” Sicat said, adding that there is less panic over emerging markets.

For fundraising activities, Sicat said the PSE estimates around P200 billion of capital to be raised this year. So far, around P52 billion was raised from the equity market, mainly because of banks that are beefing up their capital.

The operator of the local bourse also expects four to five IPOs in the first half, including the debut of DoubleDragon Properties Corp. and Century Pacific Food Inc.

In 2013, the PSE’s net income jumped 35.1 percent to P844.8 million from P625.3 million a year ago due to higher listing and trading related income.

PSE said its revenues climbed 33.8 percent to P1.53 billion on the back of notable growth on all income components: listing-related income, trading-related earnings and service fees.