PSE rushes to beat listing deadline

In preparation for its full demutualization, the Philippine Stock Exchange (PSE) is set to appoint ATR Kim-Eng Capital Partners Inc. as financial adviser for the planned listing of its shares.

Securities and Exchange Commission (SEC) Regulation Department Director Jose P. Aquino said PSE Director Gregorio Kilayco has expressed confidence that the exchange will meet the deadline imposed on it by the SEC to list its shares by the end of the year. "They know that they really have to list by December. They are planning to get ATR-Kim Eng as adviser for the listing," Aquino said.

Aquino said the exchange is now finalizing a three-year business plan which will include the proposed listing of its shares to comply with the Securities Regulation Code.

The SRC requires the PSE to go public by the end of the year with the aim of diluting broker-shareholders’ interest in the exchange to a maximum of 20 percent of outstanding capital.

Shareholders of the demutualized PSE prefer the introductory listing of the whole exchange rather than spinning off its clearing and settlement units and real estate assets.

The PSE has three subsidiaries – Securities Clearing Corp. of the Philippines, Philippine Central Depository and Philippine Stock Exchange Foundation Inc. and some property assets.

Representatives of the SEC and PSE are set to meet on Friday to discuss the planned listing of the exchange.

PSE consultants said should the PSE lists itself, investors are likely to value its shares on an earnings basis. Usually, companies are listed around 10 to 15 times their price earnings ratio. In this regard, the PSE said it should build up its earnings to acceptable levels to ensure better valuation of its shares.

The SEC has threatened to impose a P1-million fine on the PSE if it fails to list by yearend.

In the meantime, the PSE is focusing its efforts on further professionalizing its operations and enhancing its revenue sources. The exchange is exploring possible alliances with other exchanges overseas to enhance its trading system and to make it shares attractive to investors.

The PSE is also looking at developing and acquiring information technology products such as online trading systems, clearing payment and depository systems, compliance and surveillance systems, and technical analysis software and data services.

The exchange has likewise lined up new products to give investors more choices where to invest their money. Following the launching of the dollar-denominated trading board, the PSE will soon allow the listing of treasury bills.