Read this in The Manila Times digital edition.
THIS column was spurred by reading the thoughtful article written by Miguel Camus and published by Insider PH on Dec. 11 entitled "Philippines urged to unlock IPO Goldmine." It describes the findings of the Organization for Economic Cooperation and Development, and our Securities and Exchange Commission. The report notes that we have 269 listed companies and thinks there are over 400 more that could be listed. I think the report means well and has sensible recommendations, but I think tweaking listing rules will not result in meaningful improvement. My view as someone who has led many initial public offerings (IPOs) is of someone who had to do it and deal with the reality of it and not just what I read or was told. I had to convince some to list, guide many who wanted to and work with investors to convince them to invest when they did and often in difficult markets. In March 2005, the listing of SM Investments, which I was honored to sole lead, is credited with reopening the market. How significant was it? We raised $530 million when in 2004 the average trading volume of the whole stock exchange was an abysmal $3 million a day. Let's add the average volume multiplied exponentially after that. I was also financial adviser to the largest IPO in the Philippines, the $1-billion IPO of Monde Nissin. All this wasn't very easy, and we had and still have structural impediments to listing as well as regional and global realities to deal with.
The most impediment important to me is that we reputedly have the lowest participation of local investors. As a percentage, local investors make up the majority of trading volume in all stock exchanges in the region. Except us. This does not mean foreign buying is huge even though it is a majority here. Foreign trading volume is also below most other Asian stock exchanges. It is primarily lower levels of locally sourced trading volume even compared to only Vietnam, Indonesia, Malaysia and Thailand that is determining.
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