SEC defers higher minimum public float

MANILA, Philippines – The Securities and Exchange Commission (SEC) is considering postponing plans to implement a higher minimum public float given the prevailing volatility in the equities market.

In an interview, SEC chairperson Teresita Herbosa said while the agency wants to raise the minimum public float as early as this month, it has to consider the current situation of the stock market.

“We have to wait for it to go up,” Herbosa said, referring to the Philippine Stock Exchange index.

She said other factors affecting the stock market include tensions in the Middle East.

“We have to wait for the situation to stabilize,” the SEC chairperson said.

Herbosa, however, expects companies seeking to list in the exchange this year to have a minimum public float of 15 percent instead of the current 10 percent requirement.

Public float refers to the portion of share of a corporation that is owned by public investors.

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

Herbosa said the SEC would first increase the float by five percent to 15 percent and then eventually to 25 percent.

Share prices at the local stock market are currently on a downtrend amid global uncertainties that have prompted foreign fund managers to pull out from emerging economies such as the Philippines.

Herbosa said the goal is to bring the local capital markets at par with other Asean countries such as Hong Kong, Thailand and Singapore, which impose a minimum public float of between 10 percent and 25 percent.

The PSE started implementing the 10-percent minimum public ownership requirement in 2a011 to increase public participation in the local capital market.

According to the local bourse, the average free float level increased to 33.4 percent in 2013.

At least two construction giants -- D.M. Wenceslao and Datem Inc. -- are planning to list this year after putting off their planned market debuts last year.

Other companies intending to list at the PSE this year are technology company Pointwest, brokerage firm Philstocks Financial and oil giant Pilipinas Shell Petroleum Corp.