Philippine Stock Exchange

IPOs, short selling: What to expect in PSE for 2021

Ralf Rivas
IPOs, short selling: What to expect in PSE for 2021

STOCKS. The Philippine Stock Exchange's first trading day program and bell ringing ceremony for 2021.

Photo from PSE

The Philippine Stock Exchange is about to get more interesting this year, with the expected introduction of short selling and new sector classifications and indices

The Philippine Stock Exchange (PSE) aims to launch new products and expects some companies to finally go public in 2021, despite the lingering uncertainties due to the coronavirus pandemic.

Indices. The plans include increasing the sector indices from 6 to 8.

The current components of the industrial, services, and mining and oil sectors would be reclassified into more specific sectors – consumer; energy and utilities; industrial; mining and materials; and technology, media, and telecommunications.

Short selling. PSE president and chief executive officer Ramon Monzon earlier said short selling rules will be out by the 1st quarter.

Short selling will launch once concerns from foreign investors, particularly those pertaining to the securities borrowing and lending program, would be addressed and regulatory clearances are obtained from agencies such as the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue.

In short selling, traders gain profit by anticipating a fall in stock prices.

The SEC earlier approved guidelines on short selling, limiting it to companies comprising the PSE index (PSEi) and exchange-traded funds.

Data analytics platform. The PSE is also planning to develop a new self-service data analytics website for traders to learn and analyze data on their own.

“This project seeks to improve the trading experience of retail investors, from learning the basics of stock market investing for first-time investors to analyzing rich data sets for intermediate to advanced investors,” Monzon said.

PSE EASy phase 2. In 2019, the PSE rolled out PSE EASy, a web-based application that enables investors to subscribe to initial public offerings.

This year, the PSE aims to include follow-on and stock rights offerings on the platform.

Monzon said there are several follow-on and stock rights offerings in the pipeline, which include the $20-million and $250-million dollar-denominated securities offerings of Cirtek and Cebu Air, as well as the P5-billion stock rights offering of AC Energy.

IPOs. Despite the economic uncertainties due to the pandemic, Monzon remains optimistic and targets 3 initial public offerings (IPOs) and 4 real estate investment trusts (REITs) for 2021. 

“We are confident companies will be enticed to list given the revised listing rules for REITs, and even more once we receive SEC approval on our proposed amendments to the main and SME (small and medium enterprise) board listing rules,” Monzon said.

Real estate developer DoubleDragon Properties Corporation, through DDMP REIT Incorporated, earlier filed for a REIT IPO, which covers 7 buildings of its leasable properties.

DDMP REIT is aiming to raise P14.7 billion and is expected to list on February 26.

Monzon is expecting better market performance for 2021, as the government plans to start mass vaccination and further ease quarantine restrictions.

The PSEi ended 2020 at 7,139, down by 8.6% from the 2019 close of 7,815.

The circuit breaker was triggered twice last year, on March 12 and March 19, as the PSEi fell by more than 10%. It dropped to as low as 4,039.

“We take comfort from the statements made by our economic managers that the Philippine economy is poised for a recovery next year on the back of growth in OFW (overseas Filipino worker) cash remittances, record-high dollar reserves, strong Philippine peso, and a resilient property market,” Monzon said.

While news on vaccine rollouts are expected to boost the Philippine bourse, Monzon noted that “restoring the confidence of investors will continue to be a challenge.” – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.