GSIS says its divestment in PSE depends on bourse approval

The Government Service Insurance System (GSIS) said it would pull out its investments in the Philippine Stock Exchange (PSE) only when it has secured the approval of the local bourse.

The state pension fund holds 1.39 million shares in PSE, equivalent to an ownership stake of nine percent.

In a statement issued yesterday, the GSIS said it has not returned the shares yet as it is still awaiting the approval of the PSE.

The GSIS said its July 12 letter to the PSE only stated its intention to return the PSE shares purchased through a private placement in February and was merely seeking the approval of such proposal.

The pension fund also stressed that it was withdrawing its investments in the PSE due to the dissensions among PSE shareholders over the entry of private investors in the bourse, which led to the filing of a case against the previous PSE board and the private investors, including the GSIS.

GSIS senior executive vice-president Reynaldo Palmiery said the fund’s investment committee "approved the purchase of PSE shares in the hope that the GSIS, through its president and general manager Winston Garcia, together with the other members of the PSE board, will be able to formulate policies, set guidelines and initiate reforms to make a stronger PSE."

"GSIS, being a major player in the equities market, planned to actively participate in the establishment of a strengthened regulatory and policy-making framework for the market. Regretably, the continuing disagreements among the members of the PSE board hinder the attainment of this objective," Palmiery said.

"We hope that this clarification would set the record straight. We don’t want the GSIS, as an institution, to get caught in the intramurals at the PSE. The GSIS merely wants to help develop the local equities market," he added.

The Securities and Exchange Commission (SEC) has frowned on the planned withdrawal of investments by the GSIS, saying the fund should just sell its shares to a third party investor.