'Rate cut not enough to revive IPO market this year'

The Bangko Sentral ng Pilipinas (BSP)’s 25-basis-point interest rate cut on Thursday may not be enough just yet to reinvigorate companies to do an initial public offering (IPO) this year.

- RICHMOND MERCURIO

While the BSP rate cut is a good fi rst step, China Bank Capital Corp. managing director Juan Paolo Colet told The STAR that it is not expected to revive the IPO market for the rest of the year.

“It takes time for companies to plan and execute IPOs and some of them would like to see better trading multiples and volumes before pulling the trigger. I am optimistic that the IPO market will reopen in 2025,” he said.

Colet said the dovish shift in monetary policy, however, should bode well for the stock market as lower interest rates mean lower borrowing costs and improved equity valuations.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said any pick up in future IPOs would largely depend on more favorable market conditions in terms of higher levels for the PSE index (PSEi).