The Philippine Stock Exchange (PSE) is optimistic about a substantial increase in initial public offerings (IPOs) in 2024, aiming to double the number of companies going public compared to the previous year. After a sluggish 2023 that witnessed more delistings than IPOs, PSE President Ramon Monzon announced expectations for six companies to debut on the exchange this year, led by Citicore Renewable Energy Corp.
In 2023, the PSE experienced a shortfall in IPOs, recording only three instead of the targeted 14, coupled with four voluntary delistings. To revitalize the market, the exchange forecasts the mobilization of PHP 175 billion ($3.16 billion) in capital, with approximately PHP 40 billion stemming from IPOs. Last year, capital raised amounted to PHP 140.95 billion, marking a 27.8% increase from 2022.
Monzon highlighted the anticipated improvement in macroeconomic indicators as a key driver for market conditions in 2024. Factors contributing to this positive outlook include the growing domestic economy and moderating inflation. Analysts project Manila’s benchmark index to reach a range of 6,800 to 8,300 points, with the index settling at 6,450.04 in the previous year, reflecting a 1.8% decline from 2022.
The positive market sentiment is further supported by expectations of interest rate cuts by both the US and Philippine central banks, along with increased infrastructure spending. To stimulate trading activity, Monzon outlined regulatory reforms, including a proposed reduction in the stock transaction tax from 0.6% to 0.1% and a decrease in the dividend tax on non-residents from 25% to 10%.
Additionally, the PSE plans to implement initiatives aimed at enhancing trading dynamics, such as lowering the minimum investment required to buy stocks and introducing practices like algorithmic trading and volume-weighted average price (VWAP) trading.
Overall, the Philippine Stock Exchange’s strategic initiatives and positive market forecasts signal a proactive approach to fostering a dynamic and resilient stock market environment in 2024.
