By JAMES A. LOYOLA
The Philippine Stock Exchange (PSE) is keenly awaiting the plan of the Securities and Exchange Commission (SEC) to increase the minimum public ownership of listed companies to 25 percent over five years as this will drive up liquidity and market capitalization.
In an interview, PSE President Ramon S. Monzon said the move will also drive up trading volume for the bourse, which had suffered from lower-than-usual trading activity in the past year.
“We have 268 listed companies. But how many are actively traded? For us, I’d rather have 150 actively traded companies than 268 listed companies (that are lightly traded) because we don’t generate enough volume,” Monzon said.
SEC Associate Commissioner Ephyro Luis B. Amatong earlier said there’s no liquidity issue in the country today that prevents a listed company from raising cash from the money system in order for it to increase its public float to 25 percent from the current minimum of 10 percent.
Some initial public offerings had even sold 40 percent of their outstanding capital to the investing public.
“We felt that they can do it but we’ll give them a longer period to comply.
Some of these companies are very big but they’ve indicated that if we require them (to increase public float), they’d be able to do it,” Amatong said.
The SEC was supposed to implement the planned increase this year but this was delayed by other pressing matters that the commission en banc had to prioritize, such as the revision of the rules for the real estate investment trust or REIT.
He said the SEC commissioners will talk among themselves first on how to do it, but he is inclined to give the listed companies to comply with the new minimum public float rule in five years, instead of increasing it in incrementally by 5 percent to be complied with in three years until the minimum requirement reaches the 25 percent.
The 25 percent rate is already the standard among the 10-member Association of Southeast Asian Nations (ASEAN).