PSE to issue more shares when conditions are ripe

MANILA, Philippines — The Philippine Stock Exchange (PSE), the operator of the local bourse, will issue more shares when market conditions are ripe, in a move to comply with a 20 percent ownership limitation set by the Securities Regulation Code (SRC).

PSE president and CEO Ramon Monzon said the PSE may raise around P5 billion from the issuance of new shares which would enable the bourse to comply with the ownership limitations imposed by the SRC. 

Meeting the limits is necessary for the PSE to gain ownership and control of the PDS Group, the operator of the country’s fixed income exchange. 

The PSE has not been able to do that yet, but it is still hopeful it can proceed with its grand plan which it first envisioned in 2013.

“We are still hoping to integrate the fixed income with the exchange. We have to comply with the ownership requirement...The only way to do that is to dilute the shareholders...We have to issue more shares, but the economic climate has to be correct,” Monzon told reporters on Friday.

Monzon said that while the local bourse has been working to comply with the ownership limitations set by the SRC, it has not been able to do so because of some broker ownership data that was not previously captured.

The Securities and Exchange Commission said that for the PSE to gain ownership and control of PDS, it would have to comply with the 20 percent ownership limitations imposed by the SRC. 

The SRC, the corporate code in the country, imposed a 20 percent limit on ownership of an exchange by any industry or business. The SEC said that PSE’s total broker shareholdings as of Feb. 28, 2018 were equivalent to 21.71 percent or above the limit of 20 percent.

State-owned Land Bank of the Philippines offered earlier to buy the shares of the PSE in the PDS Group, but at a lower price of P215 per share. Landbank’s offer expired in March, but Monzon said there has been no new development regarding the matter.

The PSE has a grand plan to acquire the PDS Group to be at par with global practices and to deepen the country’s capital markets.