UMVA has learned that a major Philippine conglomerate, LT Group, Inc., is considering delaying the planned listing of its subsidiary, PHC, due to market volatility.
The news comes as a blow to investors eagerly awaiting the listing, which was expected to be a major event in the Philippine stock market. Financial technology firm Maya had previously announced plans to list in the United States before pursuing a listing on the Philippine Stock Exchange (PSE) in the second half of the year.
According to information obtained by UMVA, the delay could have a ripple effect on the market, reducing the number of investment opportunities available to investors. Weak listing activity could also lead to a decrease in market liquidity, making it more challenging for companies to raise capital.
A market expert warned that if delistings continue to outpace new listings, the PSE could end the year with no new listings at all. This scenario would be a significant blow to the market, resulting in fewer stocks to invest in and a weaker exchange overall.
Delisting activity on the PSE is approaching last year's level, with several companies having left or in the process of exiting the market. Asian Terminals, Inc. delisted in April, while Robinsons Retail Holdings, Inc. is scheduled to exit the bourse in July.
A head of sales trading at a local securities firm noted that if the PSE falls short of its new listing targets for a second consecutive year, it could have compounding consequences for investor participation and market sentiment. A single year of underperformance can be attributed to cyclical or external factors, but a second consecutive miss would signal a structural problem.
Regulators have introduced reforms to encourage more listings, including changes to public float requirements and proposed adjustments to listing rules. However, their impact will ultimately depend on whether they result in actual listings.
An industry expert noted that the recent reforms were intended to encourage large companies to pursue domestic listings, but if they still do not list despite the accommodations, it would suggest that deeper issues around market liquidity, valuation expectations, and investor appetite remain unresolved.
The current environment remains challenging for companies seeking to go public, with weak valuations and limited investor demand weighing on new listings. Industry experts suggested that regulators could consider temporary measures to reduce listing costs and ease access to the market as a way to encourage more listings.
Despite global market uncertainties, the PSE remains firm on its capital-raising target for the year. The exchange is counting on reforms such as the new real estate investment trust (REIT) law to spur more REIT listings and follow-on offerings.
