BDO Capital & Investments Corp., the investment banking arm of BDO Unibank Inc., expects more equity and bond deals in the second half of 2024 despite the high interest rate environment and volatile equities market.
BDO Capital president Eduardo Francisco said in a recent forum that several companies reported plans to issue corporate bonds on expectations that there would be only one or two interest rate cuts by the Bangko Sentral ng Pilipinas this year.
Francisco said one or two 25-basis-point rate cuts would be lower than the market expectation of 100-basis-point adjustment at the start of the year.
He said more companies were expected to raise funds through preferred shares offering, follow-on offering and initial public offerings (IPO) in the second semester.
“The flavor for the next quarter will be preferred shares. We are looking at four to five deals, and of course, there will also be IPOs,” Francisco said.
Among the companies that reported plans to raise funds from the equities market are Ayala Corp. (P15-billion preferred shares), DITO CME Holdings Corp. (P4.2-billion follow-on offering), Vista Land & Lifescapes Inc. (P5-billion preferred shares), Arthaland Corp. (P3-billion preferred shares) and Jollibee Foods Corp. (P8-billion preferred shares).
Companies raising funds through the bond market include Bank of the Philippine Islands, BDO Unibank Inc., Securities Banking Corp., DoubleDragon Properties Corp. and Megawide Consruction Corp.
Francisco said the Philippine Stock Exchange was expected to achieve its target of six IPOs this year.
Two companies so far listed on the local bourse in the first half of the year, including miner OceanaGold Philippines Inc. and Citicore Renewable Energy Corp.
One more is slated for listing this month—the Tiu-owned renewable energy firm NexGen Energy Corp., which is raising P580 million in fresh capital.
Francisco said there are also private equity deals and private placements happening in the market involving unlisted companies.
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