PSE eyes REITs from smaller property firms

THE PHILIPPINE Stock Exchange (PSE) is hoping that more property developers, even small- and medium-sized firms, will consider entering the real estate investment trust (REIT) market.

“We are pushing for this REIT product not only for the big real estate developers, but we wanted to target the medium and even the small property developers so that they could recycle their capital and invest,” PSE President and Chief Executive Officer Ramon S. Monzon said at a virtual forum on Thursday.

The local bourse maintains a “robust” pipeline for the second half of the year.

“So far, applications have been filed with the PSE for capital-raising activities amounting to P141.8 billion or $2.8 billion,” Mr. Monzon said. 

Three REIT companies, namely Filinvest REIT Corp., RL Commercial REIT, Inc., and MREIT, Inc., are planning to launch initial public offerings (IPO) this year.

Meanwhile, Del Monte Philippines, Inc. is planning to conduct an IPO worth P44 billion, while Jollibee Foods Corp. and Sta. Lucia Land, Inc. are also preparing follow-on offerings.

Capital raised at the local bourse in the first six months of the year amounted to P122.46 billion, already exceeding the capital raised for the whole of 2020 at P103.76 billion.

The PSE is also looking to introduce new products and services in the second half of the year, such as short selling and developing two new indices, to boost market liquidity.

“We’re trying to still follow-up the approval [from our regulators for] our short selling product, which I believe will be key to attracting foreign investors back to our market,” Mr. Monzon said. 

The PSE is waiting for the Bureau of Internal Revenue to approve the Global Master Securities Lending Agreement.

The PSE is also waiting for the Securities and Exchange Commission to approve the offshore collateral request of foreign investors, and the Philippine Depository & Trust Corp.’s application as securities lending agent. 

“We will also be increasing our sector classification to comply more with global benchmarks, we shall also be developing two additional indices,” Mr. Monzon.

It aims to launch is the mid-cap index and a high-dividend index. Meanwhile, an environment, social, and governance (ESG) sub-index is planned for 2022. — K.C.G. Valmonte