SEC may raise minimum public float by June

MANILA, Philippines -  The Securities and Exchange Commission (SEC) is looking to proceed with its plan to implement a higher minimum public float for companies starting in June after earlier planning to do this last year.

“We will do it by June,” SEC chairperson Teresita Herbosa said.

She said the SEC would initially require a gradual increase starting with five percent for new listings from 10 percent at present.

The companies that are already listed, meanwhile, will given time to increase their public float, she said.

“It will be first the new listings. And then the old ones, we can give them until the end of the year to comply,” she said.

The SEC’s goal, however, is to have all public companies have a higher float of 25 percent, time timetable for which would still be determined.

If the SEC proceeds to implement the 15 percent public float requirement by June, the goal is to implement another five percent increase by the end of the year.

“We have to see the market improve,” Herbosa said.

The SEC has long been planning to do implement the higher minimum public float but has put it on hold because of market volatility.

SEC commissioner Luis Amatong said it may be difficult for companies to comply if the market is down. “May be it will be easier for them to comply with the 15 percent if the market is moving upward,” Amatong said.

The public float refers to the portion of share of a corporation that are owned by public investors. 

The SEC’s Market and Securities Regulation Department has recommended a gradual increase in the minimum requirement until it reaches 25 percent.

As such, the SEC would first increase it by five percent to 15 percent and then eventually to 25 percent.

The higher public float was supposed to take effect in 2015 but the benchmark Philippine Stock Exchange index ended the year at 6,952.08, lower by 3.9 percent from its closing level in 2014.

The index recovered after the May 10 elections but the market has again been experiencing troubles amid various reasons such as President Duterte’s tirades against the country’s trading partners, the US presidential elections, and a looming rate hike by the US Federal Reserve.

At present, the index has been trading at a range of 7,100 to 7,300.

For this year, several companies are planning to debut on the local stock market.

The Philippine Stock Exchange hopes to see at least P200 billion raised from the stock market this year including IPOs and follow on offerings.

Among the companies planning to do an IPO this year are Wilcon Depot Inc. (P7.9 billion), Cebu Landmaster Inc. (P3.8 billion), Eagle Cement (P9.2 billion), Audiowav Inc. (P2.7 billion), Pure Energy Holdings  (P1.5 billion); Xeleb (P736 million), and The Big Chill (P500 million to P600 million).