Global equities volatility hits Philippine stock market

MANILA, Philippines — The Philippine Stock Exchange (PSE) saw its 2015 net income slide by 21% as volatilities in the global equities market tempered capital raising activities in the local bourse.

PSE said in a statement its 2015 net income went down to P683 million ($14.38 million), while its total revenues declined by 15% to P1.4 billion ($29.47 million) from a year ago.

Listing-related income, which made up 40% of operating revenues, slid by 41% year-on-year to P483 million ($101.67 million). 

“Last year was a challenging year not only for the Philippine stock market but to the global equities market in general,” PSE president and CEO Hans Sicat said.

According to Sicat, the local market was not spared from the backlash of China’s economic slowdown and the US Federal Reserve’s decision to gradually start raising interest rates.

“These developments affected both liquidity and capital market deals particularly in the latter part of the year,” he said.

More upbeat outlook

For 2016, Sicat said PSE expects capital raising activities to pick up after the Philippine elections.

“Volatility has persisted early in 2016 but we are hopeful that the country’s sound economic fundamentals will help temper these and will cause investors to continue having the Philippines in their investment radar,” Sicat said.

“We hope the volatility becomes more tempered as investors get more clarity on the impact of the global developments in our market,” he added.

While capital-raising activities for 2015 were higher, other listing activities arising from other market deals were slower compared to 2014.

Despite volatilities in the second half of 2015, the average daily turnover in 2015 managed to increase by 2% to P8.9 billion ($187.35 million) compared to P8.8 billion ($185.24 million) in 2014. 

As of February 23 this year, daily average turnover was down by 31% to P6.2 billion ($130.51 million) compared to P8.96 billion ($188.61 million) last year.

In 2015, total expenses inched by 2% to P602 million ($12.67 million), as the exchange invested in new trading system.

The construction of PSE’s new office building in Fort Bonifacio Global City also contributed to the increased spending. 

The PSE is scheduled to transfer to its new office during the first half of 2017.

The head of PSE said a chunk of the spending increase was due to investments that are being made by the company in line with its strategy of creating a bigger exchange offering more products and services.  

“Despite these, we were able to manage our expenses to help mitigate the impact of slower market activity in our financials,” Sicat said. – with a report from Chrisee Dela Paz/Rappler.com

$1=P47.50