Buying stocks on the Philippine Stock Exchange usually means paying another investor in a secondary trade, not the company directly. Companies receive public money only during initial public offerings or follow-on offerings. Trades influence share prices but do not directly fund corporate accounts.
Lance Spencer Yu explains that most stock market trades are secondary transactions. For instance, purchasing Ayala Corporation (AC) shares means the seller receives the payment, not Ayala itself. Sellers could include retail investors taking profits, funds rebalancing, foreign investors exiting, or employees needing cash for tuition or a house down payment. The Philippine Stock Exchange (PSE) matches buyers and sellers, with shares being fungible. This allows billions of pesos in Ayala shares to trade daily without fresh capital reaching the company, though prices are affected. Companies gain direct funds only when issuing new shares publicly, such as in initial public offerings (IPOs). IPO purposes include raising capital for expansion, debt repayment, projects, acquisitions, or enabling early investors to cash out. Examples: Monde Nissin’s 2021 IPO raised P48.6 billion; Maynilad’s 2025 IPO up to P34 billion. Many IPOs mix primary new shares and secondary existing ones, like Converge’s potential P40 billion deal. Follow-on offerings also provide funds, as with San Miguel Corporation (SMC)’s October 2025 issuance of P30 billion for refinancing and infrastructure. Daily secondary trades indirectly benefit companies by supporting strong stock prices and liquidity for future issuances.
