Foreigners urged to invest in PSE

The Philippine Stock Exchange (PSE) is courting a foreign stock exchange and a number of foreign groups as strategic investors in the local bourse in preparation for its listing this year.

PSE chairperson Alicia Arroyo told reporters yesterday that negotiations with these investors are now ongoing and that one group has already signified its interest to invest in the exchange. She, however, declined to reveal the identities of the prospective investors or partners.

The PSE, however, earlier said it was considering tapping the stock exchanges in London and New York Stock as possible strategic investors.

Arroyo said the exchange is targeting several dates in December for the listing of its shares by way of introduction, or direct listing without an initial public offering (IPO).

Former PSE chairperson Vivian Yuchengco, for her part, said investors should be allowed to come in and invest in the exchange prior to the listing of its shares.

Yuchengco said they are also planning to seek exemption from the ownership limitation requirements of the Securities Regulation Code.

Under Section 33.2 of the SRC, "once the exchange is organized as a stock corporation, no industry or business group may beneficially own or control more than 20 percent of the voting rights of the exchange."

The 20 percent ownership cap was brought about by the need to maintain fair play and avoid conflicts of interest in the management of the exchange.

To comply with the ownership cap under the SRC, the PSE is thus required to offer its shares to other group of investors.