By Revin Mikhael D. Ochave, Reporter
THE PHILIPPINE Stock Exchange’s (PSE) goal of six initial public offerings (IPOs) this yr may not be achievable on account of uncertainties related to US tariffs, in keeping with analysts.
“Until we see more consistency between President Donald J. Trump’s trade statements and actual policy direction, investor sentiment may remain cautious — making it more essential for upcoming IPOs to be timed rigorously and backed by strong fundamentals,” DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message on Wednesday.
“We’ve seen how market volatility can derail IPOs, with Mr. Trump’s unpredictable tariff policies shaking global equity markets… This type of bearish sentiment makes it harder for IPOs to achieve traction,” he added.
AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said that the continued trade war has increased the likelihood of an economic slowdown, weakening investors’ risk appetite.
“With markets being as weak as they’re, GCash is probably going considering that they won’t have the ability to get valuations acceptable to existing shareholders. Since they haven’t any immediate need for funds, it will be higher for them to attend for higher conditions before going public,” he said.
“We thought that the six-IPO goal was a protracted shot even before the trade war, so it’s much more unattainable now. Our most optimistic IPO estimate is 4, and only Maynilad can be big,” he added.
Electronic wallet giant GCash recently hinted at possible delays in its planned public listing, citing the Trump administration’s tariffs.
Globe Chief Financial Officer Juan Carlo C. Puno said on Tuesday that the brand new US tariffs have added quite a lot of uncertainty. Despite this, he said that GCash’s market debut would likely occur either this yr or next yr.
“I feel this uncertainty doesn’t stop us from preparing. The goal is to get GCash to a degree where we’re push-button ready. So, when the market opens up, if we discover the window where the valuations and interest we’re getting are appropriate and acceptable, we’ll push that button for the IPO,” Mr. Puno said.
Globe has a 36% stake in Globe Fintech Innovations, Inc. (Mynt), which owns GCash operator G-Xchange, Inc.
Mr. Trump recently announced his “Liberation Day” tariffs, which include a ten% duty on goods from all countries. The Philippines is subject to a 17% tariff on its exports to the US, though these, together with most reciprocal tariffs, have been suspended for 90 days.
The PSE saw its first public listing on April 8 with the P732.6-billion IPO of Cebu-based fuel retailer Top Line Business Development Corp.
Mr. Garcia said that the danger appetite amongst investors shouldn’t be there yet despite positive local aspects similar to slower inflation and easing policy rates.
“Valuations are still at levels not seen because the Global Financial Crisis of 2008, so it’s unlikely that the market may have appetite for top valuations. Firms, however, are unlikely to simply accept low valuations for his or her IPO,” he said.
Philippine inflation eased to 1.8% in March from 2.1% in February, the bottom in 58 months or because the 1.6% logged in May 2020.
The local central bank recently reduced borrowing costs by 25 basis points despite a more difficult external environment.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the danger of economic slowdown brought on by the Trump administration’s tariffs would have a negative impact on corporate earnings and valuations.
“Elevated uncertainty around US economic policy has also introduced significant volatility in global financial markets, in order that has made some foreign investors more cautious about committing to IPOs in Southeast Asian emerging markets,” he said.
Despite uncertainties, Unicapital Securities, Inc. Equity Research Analyst Peter Louise D.C. Garnace said that the P49-billion IPO of Pangilinan-led water provider Maynilad Water Services, Inc. continues to be expected to proceed.
“We imagine that the water sector is comparatively insulated from global trade tensions as growth is domestically driven. On top of this, Maynilad’s IPO has the next likelihood of pushing through, because the water concessionaire is legally required to list by 2027,” he said in a Viber message.
Mr. Colet said that Maynilad continues to be on the right track to have a “successful IPO” despite the uncertainties.
“They’re a defensive stock and dividend play, so that might draw quite a lot of investor interest,” he said.
The offer period of Maynilad’s IPO can be from June 25 to July 2, with a July 10 listing date, based on its prospectus dated March 14.
Signed into law on Dec. 10, 2021, Republic Act No. 11600 granted Maynilad a 25-year legislative franchise until 2047 to ascertain, operate, and maintain a waterworks system and sewerage and sanitation services within the West Zone service area of Metro Manila and Cavite province.
The law also requires Maynilad to supply at the very least 30% of its outstanding capital stock inside five years from the grant of the franchise.
