SMEs urged to list in stock market
MANILA, Philippines - Unicapital Inc. is urging small- and medium-sized enterprises to list in the Philippine Stock Exchange (PSE).
“We have been going around the country and we have confirmed our suspicion that smaller companies are not really aware that they, too, can list in the PSE. I think this is partly because the other investment houses do not talk to them,” Unicapital Securities, Inc. President and Chief Executive Leonardo R. Arguelles Jr. said.
He said the country’s capital market will grow further if these enterprises join the PSE. He said the local bourse is 95% composed of firms with capitalization of over P1 billion.
He said that Unicapital, a leading full-service investment house, is now going around the country to sway enterprises into listing and erase any misconceptions that the stock market is only for the “big boys.”
Smaller companies have already listed in the stock market, including Calapan Ventures Inc., Cirtek Holdings Philippines Corp., and East West Bank. Their listings were all managed by Unicapital.
Jaime J. Martirez, executive committee chairman of the Unicapital Group and managing director and treasurer of Unicapital Inc., said that in nations such as the United States, Hong Kong, and Singapore, the government encourages SMEs to use the stock market for growth strategy.
“That is what Unicapital is doing in the Philippines,” he said.
“Our objective is to be the leading independent financial services provider catering to the emerging growth sector which is the middle market. We are addressing that emerging market, which is not recognized by the big investment houses,” Arguelles added.
He said some investment houses shy away from SMEs because their yields will be smaller compared to bigger companies’ listing.
“If you look at the economics of it, to do big deal and small deal is the same in terms of man-hours. Those looking purely at profit, go for bigger deals. But we have the passion for the middle market because that is the segment not addressed adequately,” Arguelles explained.
He said Unicapital wants to provide the leeway for emerging firms, just like what Jollibee was before. “We want to be the catalyst for the development of the mid-market, which is the market that has not been addressed by the investment banks,” Arguelles said.
Martirez noted that companies in the provinces have so far shown interest in listing.
“We have a network of foreign and local investors on standby that have confidence in us. They give serious consideration to what we say, because we already have the capability,” Martirez added.