BANK of the Philippine Islands (BPI) may start its dollar-denominated bond sale in March, according to its chief finance officer.
“We’re just trying to find the right time in the market,” BPI Chief Finance Officer (CFO) and Chief Sustainability Officer Eric Roberto M. Luchangco told reporters on Monday. “If ever we do, it will probably be late in the first quarter so maybe like March. We’re already in February but we’re not yet quite ready to pull the trigger.”
This would be earlier than the originally planned second-quarter sale.
BPI last year said it would try to raise at least $300 million in dollar-denominated bonds in the second quarter to refinance debt maturing in September.
Mr. Luchangco said it could try to raise a smaller amount from the bond sale depending on market conditions. “It might be a size similar to what we’re replacing, which is $300 million. But we need to look at the timing.”
BPI President and Chief Executive Officer Jose Teodoro K. Limcaoco on Jan. 26 said the bank had ample time to issue the bonds, but it will depend on benchmark rates on the secondary market.
BPI Treasurer and Global Markets head Dino R. Gasmen earlier said the lender would issue the bond earlier than its maturity date to avoid geopolitical and economic risks.
BPI’s net income rose by 44.3% from a year earlier to P13.1 billion as revenue increased and loss provisions declined. Full-year profit increased by 30.5% to P51.7 billion.
BPI shares rose by 0.71% or 80 centavos to close at P113.40 each.
Meanwhile, BPI’s stock brokerage arm expects the Philippine Stock Exchange index (PSEi) to close at the 7,500 level this year, driven by corporate earnings amid the expected interest rate cuts by the central bank.
“There is a possibility for a slight correction or some sideways movement in the near term,” BPI Securities Corp. President Haj Narvaez said in a statement on Thursday. “It has been a remarkable rally since October.”
On Thursday, the PSEi gained 0.29% or 20.12 points to close at 6,850.16. The broader all-share index added 0.2% or 7.45 points 3,574.21.
“I still believe the arrow is pointing up until yearend. Earnings will grow around 10% this year and rate cuts are likely coming. Combined, this is a recipe for P/E (price-earnings ratio) multiple expansion,” Mr. Narvaez said.
Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. earlier said a rate cut is unlikely in the first half, and there is still room to raise interest rates amid risks to inflation and robust economic growth.
The central bank raised borrowing costs by 450 basis points from May 2022 to October 2023, bringing the policy rate to a 16-year high of 6.5%.
But Mr. Narvaez said the PSEi would struggle in the first half due to low liquidity, before rising in the second half.
“We’ve seen turnover fall to about P4 billion per day,” he said. “Back in 2021, we were doing about P8 billion. The low turnover is in line with expectations and a function of high rates offered by less risky assets. We only see it (liquidity) improving meaningfully in the back end of the year or six to nine months after rate cuts occur.”
The country would start to see a more pronounced liquidity improvement in the second half, or closer to the fourth quarter, Mr. Narvaez said. “And when you have improvement in liquidity, that will probably be accompanied as well by more foreign interest. Typically, foreign funds tend to focus on the large-cap stocks.”
Mr. Narvaez said investors should focus on large-cap stocks such as property-focused groups as liquidity improves and foreign interest increases. — Aaron Michael C. Sy