More banks seen to join stock market

MANILA, Philippines - More banks are expected to list in the country’s stock exchange as the entire financial sector is seen to remain strong and stable in the next few years, industry officials said.

In a speech during the general membership meeting of the Chamber of Thrift Banks (CTB), Philippine Stock Exchange (PSE) president and CEO Hans Sicat said the financial sector has been outperforming the main PSE index.

There are currently 31 financial institutions listed at the PSE of which 17 are banks: 10 universal banks, three commercial banks, three thrift banks and one development bank.

So far, Sicat said close to P4 billion has been raised through an initial public offering (IPO) of three thrift banks.

“I do hope that more banks consider listing at the stock exchange despite the recent sell-off,” Sicat said, noting that country’s stock market is likely to perform well this year.

He said they are also expecting some foreign banks to list in the stock market between now and 2014 in compliance with the Bangko Sentral ng Pilipinas (BSP) rules.

The PSE chief said he also expects banks to continue to post robust earnings this year.

He said he also sees more consolidation in the banking industry with BSP providing ample incentives for merging banks.

He added that there would also be more capital raising activities in the financial sector as banks try to comply with the global Basel 3 requirements.

For his part, CTB and BPI Family Savings Bank president Jose Teodoro Limcaoco welcomed the initiative of the PSE to encourage the listing of banks in the stock market.

Limcaoco said listing at the exchange will be healthy and will promote good housekeeping and transparency among thrift banks.

He said the PSE is also a good venue to raise capital to expand operations of thrift banks.

As this developed, Sicat said they hope to increase the participation of retail investors in the stock market.

The PSE president said they are targeting to jack up the number of retail players at the local bourse to 15 percent next year from this year’s 10 percent.

Sicat said they have introduced a number of investment products that would cater to this market such as the exchange traded funds, personal equity retirement account (PERA) products which is the Philippine version of the US 401k, and other index options and futures.