PSE allows listed firms to buy back shares

The Philippine Stock Exchange has relaxed its grip on companies buying back their own shares at the market, allowing them to accumulate up to 10 percent of their total capital stock.

In a statement, the PSE board of governors said it has adopted a policy of allowing listed companies to acquire their own shares from the market up to 10 percent of the issued and outstanding capital stock of the company.

The PSE said it views this share buyback policy as "a positive move not only to allow listed companies to take advantage of attractive prices of their own shares but also to inject needed liquidity into the market place for the benefit of the investing public."

Upon implementation, the buyback policy will still be subject to compliance with PSE rules, which require the submission of a share buyback plan to PSE and the disclosure of the buyback transactions (number of shares and transaction prices) within 24 hours.

Listed companies such as Jollibee Foods Corp. and Aboitiz Equity Ventures have recently initiated their respective share buyback program at the PSE.

In support of this buyback policy, the PSE board reiterates its stand of exempting listed companies from the minimum public ownership of 10 to 33.5 percent for a period of two years.

The PSE has suspended the minimum public float in 1997, when the financial crisis struck the entire Asian region, as a precautionary move to avert corporate failures owing to the lack of market liquidity.– Conrado Diaz Jr.