PSE asks DOE to ‘crack whip’ on energy firms up for listing

The Philippine Stock Exchange (PSE) is urging the Department of Energy (DOE) to "crack the whip" on energy companies that have been deemed eligible for public listing in an effort to open these firms to more investors and drive up liquidity in the market.

PSE officials said several firms are already ripe for listing, among them the Malampaya natural gas operator Shell Philippines Exploration Inc., First Gas Holdings, petroleum giants Pilipinas Shell and Caltex, and PNOC-Energy Corp.

Only a handful of energy-related companies are listed in the exchange, the latest of which is Salcon Power Corp. which operates a number of power generation plants in the country. Other listed energy firms include Petron Corp., First Philippine Holdings and electric distributor Meralco.

The implementation of the oil industry deregulation law and the newly-enacted Electric Power Industry Reform Act have opened the door for companies, particularly foreign firms, to freely enter the country’s power and energy sector but have also tied them up for listing requirements within five years of operations.

The deep fiscal incentive package also offered by the Board of Investments to the capital-intensive projects of these companies have likewise made it mandatory for them to list their share in exchange over a 10-year period upon availment of the tax perks.

The PSE has been encouraging companies, from the small-to medium-enterprises (SMEs) to the highly-capitalized, foreign-tied business, to list their shares as a way of tapping into the capital market for cheaper sources of funds and expanding the portfolio of market investors.

As this developed, the PSE is considering the return to its original trading schedule from 9:30 a.m. to 12 nn, as the bourse – with cost-cutting measures in consideration – said it has not been able to substantially improve on the turnover volume since the extended afternoon sessions took effect last February.

The PSE’s floor trading and arbitration committee will conduct a new survey to member-brokers to get their sentiment on the matter. In a prior survey two months ago, most brokers tumbled down the re-scheduling of the afternoon sessions to stretch up to 4 p.m., preferring instead to stick to the prevailing extended market hours of from 1 p.m. to 2:30 p.m.

In a related development, the Department of Energy (DOE) said it is losing its patience over the continued delay in the public listing of Pilipinas Shell Petroleum Corp. and Caltex Phils. Inc.

Under the Oil Deregulation Law, the three oil majors were mandated to offer at least 10 percent of their equity to the public starting 2000. However, Shell and Caltex sought an extension due to the poor economic conditions while Petron had already gone public much earlier.

Energy Secretary Vicente S. Perez Jr. said he is considering slapping penalties on Caltex and Shell if they continue to dodge the issue. "They will pay a fine," he said.

Last May, the energy secretary urged the two oil majors to list but they insisted that the economy and the stock market was too slow to make it profitable for them to sell 10-percent of their equity.

Perez on Thursday again insisted that they start their public offering this year. "I feel that it is as a good time to go public. Their deadline has expired under the law." – With Ted Torres