PSE offers stake to Singapore bourse

Published December 3, 2020, 4:41 PM

by James A. Loyola

The Philippine Stock Exchange is offering to sell up to a 5 percent stake in bourse to a strategic investor such as the Singapore Stock Exchange is already its partner in the Philippine Dealing System group.

In an interview after the PSE’s annual stockholders’ meeting, PSE President Ramon S. Monzon said the PSE has made the offer to the Singaporean bourse because “we have a very close working relationship.”

Aside from its 21 percent stake in the PDS Group, the Singapore Stock Exchange is also working with the PSE on the trading of derivatives as well as pursuing the interconnection of both exchanges.

Monzon said they are offering the PSE treasury shares consisting of the P630 million worth of stock the bourse has bought back from stockbrokers to bring down the ownership of brokers to below the 20 percent cap imposed by the Securities Regulation Code.

Also on the table are the PSE shares held by investment house First Metro Investment Corporation which had been forced, as the underwriter, to buy and hold on to the PSE shares that were not taken up during a stock sale also meant to dilute ownership of brokers.

Meanwhile, Monzon said that, under its new mandate, the PSE Board of Directors and Management, intends to execute several plans including setting up new sectors and indices.

 “Right now, we have six sectors and we are increasing this to eight sectors in the first quarter of 2021. We’ll be adding a Consumer sector and a Technology, Media and Telecommunications sector. We are also in the process of coming up with new indices, maybe a middle capital index and an index for dividend paying companies for those with a dividend paying record,” he said.

     The PSE is also looking forward to the listing of three real estate investment trusts (REITs) in the first half of next year or once they have completed their paperwork.

     Monzon noted that REITs have been delayed due to the difficulty of obtaining a ruling from the Bureau of Internal Revenue that the transfer of property from the sponsor company to the REIT is a tax free exchange.

     He explained that while the REIT rules have already been approved and that these provide that such property exchanges are tax-free, a BIR ruling is still required and it takes time for the BIR to issue such rulings.

     The PSE is also optimistic that more firms will be going back to the stock market to raise fresh funds since banks have been tightening their lending standards amid the pandemic.     “Hopefully, a lot of companies will have no place to go to raise funds except the equity market,” said Monzon.