By Honey Madrilejos-Reyes
Reporter
STOCK offerings through the Philippine Stock Exchange (PSE) generated P57.22 billion worth of capital in 2006, or 10.7 percent higher than the 51.7-billion offering proceeds registered in 2005.
In a statement, PSE president and chief executive officer Francis Lim said the stock market closed 2006 with the biggest amount of capital raised since 1994, when the PSE began to operate as a stock exchange.
He attributed the higher offering proceeds to the overall surge in local stock prices. Stock prices, as tracked by the PSE index (PSEi), have advanced by 42.3 percent from their level at the end of 2005.
"I am pretty sure the continued advance of the PSEi, which is now at its highest level in nine years and nine months, has created a strong urge among many companies to offer their shares to the public—rather than incur expensive loans—to finance their projects," Lim said.
He added, "These projects, which have been funded by offering proceeds, are now providing work for thousands of … workers and creating business opportunities for many subcontractors and suppliers."
Based on the bourse's latest figures, at least P19 billion of the capital raised represented proceeds from the initial public offering (IPO) of four firms in 2006.
These IPOs, along with the amount of equity raised, were PNOC Energy Development Corp. at P9.6 billion, First Gen Corp. at P9.09 billion, Alliance Tuna International, Inc. at P180.9 million, and CitisecOnline.com, Inc. at P149.6 million.
The bulk of new equity, amounting to P29.7 billion, represented proceeds from follow-on primary offerings of six companies. The six, along with the amount of equity raised were Metropolitan Bank & Trust Co. at P6.6 billion, Ayala Corp. at P5.8 billion, Megaworld Corp. at P5.6 billion, Robinsons Land Corp. at P5.4 billion, Universal Robina Corp. at P4.8 billion and Chemrez Technologies Inc. at P1.5 billion.
The rest of the capital represented offering proceeds of P2.3 billion in stock rights and P6.2 billion in private placements.
"Companies sometimes entertain second thoughts about offering their shares to the public, especially when the market is uncertain. But the continued rise in the PSEi, which we have been enjoying since 2004, has provided these companies with the confidence to offer shares to the public. And they are not regretting the decision," Lim said.
"We are facing an election year, but I am sure our political leaders understand that the market can sustain its growth in 2007 and in the coming years, only if we can keep in place correct, sober and predictable political and economic policies," he added.
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