Small firms plan maiden share sale next year

Capital-raising activities are expected to pick up next year with “less than 10 small and medium-sized enterprises" planning to undertake an initial public offering (IPO) next year. This was disclosed by executives of Punongbayan & Araullo, a member firm within Grant Thornton International Ltd. Small companies have sought their assistance for their IPOs in anticipation of the imminent economic recovery, the accounting firm said. “SMEs really want to expand their business," said Lilia Linsangan, Punongbayan & Araullo partner and division head of Specialist Advisory Services. Besides IPOs, other companies also plan to bankroll their business expansion through private placements from various investors. If the worldwide economy continues to improve, more active capital markets are expected next year, Linsangan added. In the local stock market, the last major initial public offering was in May 2008 when San Miguel Brewery Inc. sought to raise P25 billion. After SMBI's maiden share sale, the latest IPO was of software firm Ripple E-Business earlier this month when it sought to raise net proceeds of P17.7 million. Besides being the country’s first IPO for the year, Ripple E-Business’ share sale was also the first in more than 15 months. “I’m hoping it’s the start of an IPO trend in the Philippines on the back of the widely perceived economic recovery," Francis Ed. Lim, PSE president and chief executive officer said. A number of IPOs in the local stock market have been canceled last year after the global economic meltdown discouraged investors from entering risky markets such as the Philippines. Cancelled IPOs included maiden share sales of Cebu Pacific operator Cebu Air, oil and gas logistics operator Petrolift Inc., contact center operator ePerformax, and movie and entertainment company Viva Communications Inc. - GMANews.TV