PSE may ease requirements to attract more listings

The Philippine Stock Exchange (PSE) is considering easing its listing requirements to encourage more companies to list on the bourse.

PSE president Francis Lim said the exchange, for one, is looking at liberalizing the listing rules for small and medium enterprises to help them obtain capital through the stock market.

Lim said the exchange may relax the track record and operating history requirements of its listing rules to accommodate more companies, particularly SMEs. To date, only three companies are listed on the SME board, namely SQL Wizard, Makati Finance Corp. and Cashrounds.

This move, he said, is in response to Trade and Industry Secretary Peter Favila’s request for the exchange to create an environment that will entice more companies to list.

Just last week, the PSE held a seminar for Board of Investments-registered companies to get them interested to list on the exchange. "I’ll do everything I can to push companies to offer their shares to the public so there will be more quality companies that will be listed. If we have a list of good companies then the market will grow by leaps and bounds," Lim said.

Lim said several companies, including Splash, Pascual Laboratories, Yazaki Torres, Unilab, and Dutch Philippines have signified their intention to list.

Lim said the exchange is bent on seeing the listing of power firms, telecommunications firms and BOI-registered entities on the exchange to boost trading activity.

Despite the mandatory listing requirement for energy or oil companies, they were able to delay their listing, citing poor market conditions.

The oil deregulation law requires oil firms to offer at least 10 percent of their outstanding shares to the public three years from the effectivity of the law or in February 2001.

Among the oil firms operating in the country, only Petron Corp. made its debut at the PSE with the listing of 20 percent of its outstanding capital stock in 1994.

Once dubbed as a get-rich-quick investment option, an IPO is a means of raising funds for expansion and capital, employed by companies as a cheaper alternative to the more expensive debt instruments such as bonds and bank loans.

An IPO is done by selling a portion of the company’s shares of stock at a price based on its book value or on its projected earnings for the year. These shares are then listed with the PSE so that stockholders and investors may trade the issue. Of the 237 firms listed in the exchange, only 100 are actively traded.