No wrong time to do an IPO, says PSE chief

MANILA, Philippines — There is no wrong time to do an initial public offering (IPO) if you will ask Philippine Stock Exchange president and CEO Ramon Monzon.

“I’m often asked these days if companies with IPO plans are correct in waiting for, as they say, better market conditions. My answer has consistently been if your company has a good story and potential and it needs capital to pursue its development or expansion plans, that is the appropriate time or correct time to list your company,” Monzon said during the listing ceremony yesterday of NexGen Energy Corp., the country’s third IPO this year.

“The more companies that defer their IPO plans because of what they call poor market conditions, the more these poor market conditions become a self-fulfilling prophecy,” he said.

Monzon cited as a good example the IPO of Ayala-backed AREIT Inc. back in August 2020.

AREIT, the first real estate investment trust (REIT) in the Philippines, raised P12.34 billion from the sale of primary and secondary shares during its IPO.

“AREIT was the first ever REIT to list in the market and it did so at the peak of the pandemic. Its investors, however, have been richly rewarded with consistently healthy cash dividends and a stock price that has consistently been trading above its IPO price,” Monzon said.

“Knowing first hand what it takes and what it means to be a listed company pushed AREIT to pursue its IPO plans even when the market was listless and naysayers said wait for better market conditions,” he said.

The PSE has set a target of six IPOs and about P175 billion worth of capital to be raised for 2024.

Three companies have so far went public this year, with NexGen following the successful market debuts of OceanaGold Philippines Inc. and Citicore Renewable Energy Corp.

Last year, the PSE saw three IPOs, down from nine in 2022, the most number of IPOs in a single year since 2007.

Highly anticipated IPOs of Enrique Razon’s Prime Infrastructure, SM Prime’s REIT and Ayala-backed e-wallet pioneer GCash have all been deferred and are unlikely to take place this year.

BDO Capital & Investment Corp. president Eduardo Francisco earlier said that the PSE’s target of having six companies going public this year is still achievable.

However, Francisco said potential IPOs in the pipeline might not proceed this year if market conditions are not good.