Okada Manila and Hann Resorts are among the initial public offerings (IPOs) lined up for 2025, says Deloitte Singapore.
Financial advisory firm Deloitte has expressed cautious optimism about the prospects for initial public offerings (IPOs) in the Philippines in 2025, predicting that the market could see a variety of IPOs, particularly from gaming, energy, and resource companies.
In a virtual briefing held on November 19, 2024, Darren Ng, the Transactions Accounting Support Partner for Deloitte Singapore, noted that the outlook for the Philippine stock market in 2025 is one of “cautious optimism.” He emphasized that, while there is uncertainty, the pipeline for IPOs appears promising with diverse companies preparing to go public.
“I think from that perspective, if you look at what’s in the pipeline for the Philippines as well, there should be more IPOs happening in 2025 and in a mix of different industries," Ng was quoted as saying in a Business World report.
Among the gaming companies expected to pursue IPOs are Okada Manila and Hann Resorts, both of which have been discussed in market circles for their potential listings. The gaming sector continues to draw attention due to its growing influence in the region, as well as the continuing expansion of integrated resorts and gaming facilities in the Philippines.
“There are two gaming companies, Okada Manila and Hann Resorts, and with a continued interest in energy and resources, we do think that there should be more IPOs coming for the Philippines,” Ng pointed out.
In addition to gaming companies, the energy and resources sectors are also expected to contribute to the IPO landscape in 2025. This outlook aligns with recent industry trends where energy and renewable energy companies have been active in the stock market.
The Philippine Stock Exchange (PSE) has also previously indicated that it expects to see six IPOs in 2025, a target that reflects growing investor confidence despite challenges in the broader market.
Several high-profile companies are reportedly planning IPOs, though the exact timing remains uncertain. Companies such as SM Prime Holdings, Inc.’s real estate investment trust (REIT), Razon-led Prime Infrastructure Capital, Inc., Maynilad Water Services, Inc., and the digital wallet platform GCash have been named as potential candidates. However, as of now, there is no official timeline for these listings.
The PSE had initially set a target of six IPOs for 2024, but only three IPOs have been completed this year. These include mining company OceanaGold Philippines, Inc., as well as renewable energy firms Citicore Renewable Energy Corp. and NexGen Energy Corp. Combined, these three companies raised $203 million and achieved a market capitalization of $972 million in the first three quarters of 2024.
Despite this, not all planned IPOs came to fruition. Cebu-based fuel retailer Top Line Business Development Corp. had initially scheduled an IPO this year, but the company decided to postpone its public offering. On Monday, Topline announced that it would delay its IPO until the first quarter of 2025 in order to accommodate institutional investors.
The postponement of IPOs in 2024 has been attributed to less favorable market conditions. The Philippine Stock Exchange index (PSEi) has experienced a decline, dropping from a near five-year high of 7,554.68 on October 7, to 6,803.19 by Tuesday. While the index rose 0.61% from Monday’s close, local analysts point to the overall slump in market sentiment as a contributing factor to the delay in IPO activities.
Luna Securities, Inc. President and Co-Founder Francis Patrick Diaz noted that the “wait-and-see” attitude among investors continues to dominate, particularly with the uncertainty surrounding global financial markets. He pointed out that the direction of the U.S. economy and its policy decisions, especially regarding interest rates, will play a crucial role in shaping market conditions in 2025.
"Given our recent slide, we are more wait-and-see. Aside from waiting on specifics on United States policy such as interest rates, next year is also an election year,” said Diaz. He further explained that uncertain economic conditions may lead some companies to delay their IPO plans if market conditions are not as favorable as they hope.
Rizal Commercial Banking Corp.’s Chief Economist, Michael Ricafort, echoed similar sentiments, highlighting the impact of rising market volatility. He cited the global uncertainty following Donald Trump's victory in the U.S. presidential elections and its potential to affect investor sentiment. Ricafort noted that the prospect of higher inflation and potential interest rate adjustments in the U.S. could reduce the attractiveness of stock market investments, including those in the Philippines.
“Rising volatility in global and local markets since Mr. Trump’s victory could lead to a wait-and-see attitude. Issuers might prefer to wait for better market conditions, particularly if they hope to sell shares at the highest possible valuations,” Ricafort said. He also mentioned that U.S. economic policies, such as tax cuts, could further influence inflation in the U.S. and subsequently impact global financial markets.
While the immediate outlook for IPOs in the Philippines appears subdued, Deloitte’s optimism is grounded in the country’s strong consumer base and the strategic importance of sectors like real estate, healthcare, and renewable energy. Southeast Asia remains an attractive region for investors due to its growing middle class, lower operating costs, and geopolitical neutrality, which many large tech companies find appealing for investment.
Deloitte’s report placed the Philippines fourth among Southeast Asian nations in terms of IPO amounts raised this year, trailing behind Malaysia, Thailand, and Indonesia. However, the Philippines still outpaced Vietnam and Singapore in this area, further indicating the country’s potential in the IPO market moving forward.
Read related article: Okada Manila Reports 33.4% Revenue Drop to $142M in 3Q 2024
Comments