Philippines to top southeast Asia IPO market in 2021

A set of Philippine companies may make the country the biggest IPO market in southeast Asia in 2021.

According to deta published by Refinitiv, consumer retailers and real estate investment trusts (REITs) are putting up fundraisings that could cross the $4 billion mark in 2021, that would make up more than the total amount for the past 7years.

Martin Siah, Bank of America’s Head of corporate and investment banking stated: “We see a confluence of abundant liquidity, recovering macro fundamentals and relative valuation attractiveness contributing to the positive investor sentiment towards Southeast Asia IPOs. The strength in global capital markets has made it very attractive for quality Philippine issuers who have been timing their eventual IPOs.”

According to Reuters, the biggest local IPO is a $1.5 billion float by Monde Nissin, the company behind the Quorn meat alternative. Other IPOs include two $500 million REITs, from conglomerate-owned SM Prime and Robinsons Land. Vice president for investor relations of SM Prime commented: “It is really a question of when, not if. On the size, it depends on what the market can absorb.”

Issuers want to take advantage of the abundant market liquidity and tap investors before the 2022 presidential elections. “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,” stated Michael Gerard Enriquez, CIO of Sun Life of Canada (Philippines).

The economy hit a record low 9.5% in 2020, the worst contraction in southeast Asia last year, following the imposition of one of the world’s most stringent lockdown measures by the Philippine authorities.

However, economic analysts expect the record $93.7 billion national budget to pump-prime the economy, which government officials say is on track to expand by 6.5-7.5% in 2021.