PSE bullish on sealing PDS takeover this year

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) is bullish on completing the planned acquisition of the Philippine Dealing System Holdings Corp. (PDS) within the year, paving the way for the integration of the local bourse with the fixed-income exchange.

PSE president and CEO Ramon Monzon told The STAR that he is confident that the PSE’s purchase of up to 100 percent of the PDS Group will be sealed this year.

Monzon said that it is just a matter of price issue.

The PDS Group is the operator of the Philippine Dealing and Exchange Corp., the country’s sole fixed-income exchange.

The PSE owns 20.98 percent of the issued and outstanding capital stock of the PDS Group.

Other PDS stockholders include the Bankers Association of the Philippines (BAP) with more than 28 percent, Singapore Exchange Ltd. (20 percent), Tata Consultancy Services Asia (eight percent), Whistler Technologies Services Inc. (eight percent) and San Miguel Corp. with (four percent), among others.

Last December, the Securities and Exchange Commission approved the PSE’s application for exemptive relief in its acquisition of additional shares in the PDS Group.

The regulator’s commission en banc allowed the PSE to exceed the mandatory limit of 20 percent on ownership and voting rights in an exchange by an individual or an industry, granting it leeway to own up to 100 percent of the PDS Group, subject to certain conditions.

Upon securing the regulatory approval from the SEC, the PSE then started to engage the shareholders of PDS.

The BAP, the lead organization of universal and commercial banks in the Philippines, earlier said that it is keen on selling its stake in PDS to the PSE at the right conditions.

According to the PSE, the resulting integration of the country’s equity and fixed-income exchanges will allow for the delivery of more efficient and more types of products, services and better risk management systems for financial services.

“PSE continues to pursue projects that will sustain the company’s growth over the years. This includes the planned acquisition of the Philippine Dealing System Holdings Corp., which we target to complete in the next few months,” Monzon said.

In the first half, the PSE reported a net income of P398.02 million, down by 4.7 percent from P417.51 million in the same period in 2023.

Operating revenues during the six-month period also slipped by 2.3 percent to P722.75 million.

The PSE attributed the drop in operating revenues to the 10.7-percent reduction in average trading value during the semester, which decreased the income from service fees by P16.2 million and transaction fees by P9.07 million.

It said a 33.6-percent jump in data revenue helped partially offset the decline in revenues.

Listing-related revenues inched up by 0.2 percent year-on-year as listing fees increased to P290.98 million.

During the first semester, the PSE saw two companies conduct their initial public offerings, three listed firms had their follow-on offerings, one listed company did a stock rights offering and three companies listed their shares issued via private placement transactions.

“Persistent high interest rates and geopolitical concerns contributed to tepid trading in the first half. We hope to see more active trading for the rest of the year on expectations of a rate cut and the record first half earnings of banks and other listed firms,” Monzon said.