PSE shares shoot up upon listing

As the Philippine Stock Exchange’s own shares were listed yesterday, the Securities and Exchange Commission (SEC) has advised brokers to stick to their promise of divesting their shareholdings in the bourse to fully comply with the securities law.

At its introductory listing yesterday, the PSE was the top gainer and among the most heavily traded with a total of 53,700 shares changing hands for a total value of P12.93 million. The shares traded between P240 and P252.50 before closing at P240 per share, which is 123 percent higher than the stock’s book value of P107.72.

SEC Chairman Lilia R. Bautista however, said the commission may be forced to impose a deadline for the exchange to meet the 20 percent single industry shareholder ownership limit under the Securities Regulation Code if the brokers refuse to sell their shares.

"If we see more trades and it looks good, we will not impose a deadline. But if not, we will force the issue,"Bautista said.

Under the SRC, no individual can own more than five percent of the exchange and no single business group can hold more than 20 percent. Each of the exchange’s 184 member-brokers were given 50,000 PSE shares in exchange for their seats in the PSE following the local bourse’s conversion from a mutually-owned company into a stock corporation in 2001.

To ensure full compliance with the ownership cap, the SEC has issued an order prohibiting broker-dealers from purchasing shares for their own account or the account of their subsidiaries and affiliates and their directors, officers and principal stockholders and the spouses and relatives up to the fourth civil degree.

The order also prohibits broker-dealers from reacquiring PSE shares through any other means from third persons for their account or for the account of their related persons.

PSE chairman Alicia Arroyo said the listing of the bourse’s 9.2 million shares is a further step toward its full compliance with the SRC to divest its shares and widen its shareholder base.

"By listing, we are not only inviting non-brokers to be owners of the exchange, we existing shareholders will finally determine the market value for our shares. We are now free to sell our shares at a final sales tax. Even in this market condition, there is value in PSE. By listing, we as broker shareholders will be the first ones to say this and convince the world that PSE is a conduit for business opportunities,"Arroyo said.

Arroyo said the exchange over last two years went through the rigorous but very vital process to lay the groundwork and fulfill the requirements mandated by the SRC, particularly the demutualization or the conversion of PSE from a non-profit, member-governed organization to a for-profit, investor-owned corporation.

Arroyo said the exchange is committed toward building a stronger equities exchange as a venue for raising capital.

The PSE expects to meet the ownership limit rule under the SRC next year as it holds talks with a number of local institutional groups to invest in the exchange. ATR Kim Eng Capital was appointed as financial advisor for PSE’s share listing.

"We’re talking to local financial institutions first. But there is also demand outside. ATR-Kim Eng Capital Equities executive director Roberto Benares said.

Apart from the Philippines, other Asian countries that have listed their exchanges are Singapore, Hongkong, Australia and New Zealand. The Osaka Securities Exchange Co., Japan’s second-largest stock exchange, applied this week to sell shares on its Hercules market.

Last year, PSE earned P27.96 million from its listing-related charges, its main source of revenue. The amount is 52.87 percent higher than the P18.29 million registered in 2001.

Listing revenues for the first nine months of the year comprised of annual listing maintenance fees (64 percent), additional listing fees (34 percent), and new listing fees (2 percent).

Other sources of revenues are membership fees, data feed and miscellaneous fees which include service fees.