00:00We just heard from Averill talking about the valuations in the Philippines, pretty cheap, yet investors continue to make an
00:06exit. Why is that?
00:07Well, I think it's more confidence. As you say, our P ratio is a single digit. I think as of
00:16December 2025, we're at 9.74. Everybody's at 14, 15, 16.
00:22So, there is some value that's not being tapped by foreign investors. So, I think it's more confidence and perhaps
00:31really liquidity. So, we really are focusing on improving liquidity in our market.
00:36So, what are you doing to address liquidity, to also bring back confidence in the market?
00:41First, number one, we have to increase the number of product offerings. So, we are working very hard to launch
00:50the Global Philippine Depository Receipts, which is a cooperation among the same exchanges where Singapore stocks or Thailand stocks can
01:03be traded here on DR, and the Philippine stocks can be traded in Singapore, Thailand, or Indonesia.
01:09So, we're working on that for a long time. We're probably the only market without a derivative product. So, we
01:16are working very hard to launch a derivative product.
01:19We hope to have one, at least on the index futures, by the first quarter of 2027. In the meantime,
01:26we, the regulator, the PSE, have been working together to try to get more listings in exchange.
01:34Recently, our regulator has come up with a regulation reducing the minimum public flow for IPOs from 20% to
01:4415%, and even lower should the market capitalization of the applicant exceed 200 million pesos.
01:52So, we still have the big Gcash IPO on track. We have our first listing, which is a listing by
02:02way of introduction of PNB Holdings.
02:06I've been talking to some of the investment bankers here. Apparently, there are many companies in the wings to raise
02:15capital at the exchange for existing listed companies already.
02:20So, in terms of pipeline, what's the number like for 2026?
02:23Okay. At the beginning of the year, we had the forecast, a capital raising target of about 170 billion. I
02:34think this is still on track. I mean, we are still, you know, focusing on having at least four IPOs,
02:43two big ones.
02:46And I guess I'm being overly optimistic, but I think we might exceed that because our regulator has also relaxed
02:56the regulations on RIT listings, where now data centers, toll roads, and even tower companies can do a RIT listing.
03:07And I understand there's one big data center company that's preparing for listing. So, that was not in our pipeline,
03:15but, you know, that's some good news for us.
03:18In terms of the mega listings, how many might that be for the year?
03:21Of course, everybody's looking at GCash for the mega listing. We think there's going to be a big, not an
03:30IPO, a follow-on offering perhaps for a mining company.
03:35A big follow-on offering for, well, not a follow-on. It's going to be a follow-on because Morocco
03:44has bought a listed company, and I think they will be doing a re-IPO or a follow-on offering
03:50for their biggest solar project in the whole Asia.
03:53But some companies are looking to IPO elsewhere. In the U.S., for instance, PLDT's Maya is one of them.
04:01I mean, this is an IPO worth about $500 million, the estimate. And also, Jollibee's International Unit looking to IPO
04:07in the U.S. as well.
04:08Why do you think they're choosing to do it overseas?
04:11Okay. First and foremost, let's talk about Maya. Maya is much smaller than GCash, at least in terms of income,
04:22net income.
04:23And even GCash had seriously considered listing abroad instead of the Philippines. But after studying it, they realized they might
04:36have a good IPO listing, but after that, they become orphans.
04:41So, why are companies looking to listing in the U.S. like Maya or even GCash at that time?
04:47I think it's the push of the private equity investors who want to exit and want to get, hopefully, a
04:56bigger amount for their shares.
04:58Where, on the other hand, Jollibee, I understand their plan to lease or spin off their international restaurant chain, which
05:07makes, I think, good sense.
05:09Because it's a high growth. It's not yet making money. It's dragging down the earnings of the mature Philippine companies,
05:20which is affecting their price here.
05:22So, I think spinning off their international operations and listing abroad makes good sense for them.
05:28Given the measures that you're implementing to build liquidity, to build confidence, I mean, in terms of the IPO market,
05:35realistically, where might you be in 2027, 2028?
05:40Are there targets that you've set for the exchange?
05:42Yes. Well, at the exchange, we don't look so much at the IPOs, but more on the capital race.
05:49We take our mission of being a platform for capital racing very seriously.
05:57IPOs, like I said, we have a few mega IPOs that we think are in the pipeline.
06:02But going to 2027, 2028, we're really pushing more SMEs listing.
06:09Get more people, more companies to raise capital in the market.
06:13And give more product offerings or, you know, company offerings to retail investors.
06:20In terms of offerings, you've also launched a short selling by 2023.
06:25But there's hardly been any short selling activity.
06:28It has been a long, arduous journey.
06:31You know, we're dealing with two regulators, basically the SEC and our tax authorities.
06:38And we have been engaging them for the last three years.
06:41I think we're almost at the homestretch.
06:44We've gotten all the GIBSLA, the Global Master Securities Lending Agreement, approved by the BIR.
06:53We've gotten approval for direct pool lending so that foreign borrowers and foreign lenders don't have to register here,
07:00but can do an appointment of a local participant.
07:06In this case, PDTC, the depository.
07:11The only thing we're waiting for at this point in time is we are starting to populate the lending pool.
07:18So we're talking to insurance companies.
07:21We're talking to the pension funds.
07:22So we need to get, you know, more lenders to populate the pool of lending.
07:29So activity can pick up in the next 12, 24 months?
07:32What kind of activity are you anticipating?
07:34You know, but before the year ends, our short selling will be getting up.
07:38Before the year ends?
07:38Yes.
07:39And I'm also wondering the impact on the Iran war.
07:43Is that impacting sentiment in the Philippine market?
07:45Because we've seen an exit of foreign funds on the back of that.
07:48Is the Philippines getting sold along with the other emerging markets?
07:52Yes.
07:53I would say, you know, our market is doing very well.
07:57For the first two months, we were up about 9.2%.
08:01Our index last February 27, the day before the Iran attack, was a 6,611.
08:10Just 90 points away or 1.6% away from the market being in bull territory,
08:16meaning that 20% increase on the low last November.
08:19But, of course, again, the Iran war happened.
08:24For the first two months, well, our net foreign selling in our market was about 51.2 billion pesos in
08:332025.
08:34In the first two months of the year, this turned around into a net foreign buying of 26 billion.
08:41Our volumes were up, so we're, you know, on track to a, you know, a recovery path.
08:47And then, of course, the Iran thing happens.
08:50Since then, from the net foreign buying of about 25.3 billion,
08:57we still have a net foreign buying of about 18.5 billion.
09:01When do you see foreign money coming back?
09:04Well, it will all depend on what's happening in the, you know, in the region.
09:08I mean, I think a lot of people are, you know, on a wait and see.
09:16But I think, again, if there is some imminent resolution or ceasefire or something of the conflict,
09:26I think foreign investors will start coming back into the market.
09:30So hopefully by the end of the year.
09:31Yes.
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