GSIS free to sell its PSE shares

With the Government Service Insurance System (GSIS) declaring its intention to pull out its investment in the local bourse, the Philippine Stock Exchange (PSE) said private investor groups are free to sell their shares the exchange.

PSE officer-in-charge Peter Favila told reporters yesterday that the exchange "is in no position to prevent anyone from selling their shares" in the bourse. He said the PSE board, though, would still decide on GSIS’ plan in the next regular board meeting on July 28.

Earlier, PSE chairperson Alicia Arroyo said GSIS should no longer be allowed to return its shares to the PSE, saying the deal has been consummated. GSIS holds 1.39 million shares of PSE, equivalent to a 9.1-percent ownership stake.

Favila, however, said the exchange is keeping the communication lines open and is hoping that things will be sorted out for the good of the capital market.

The state pension fund’s decision to return its shares was triggered by the dissension caused among PSE shareholders over the entry of private investors in the bourse. This even led to the filing of a case against the previous PSE board and the private investors, including the GSIS.

The PSE shares were bought by GSIS and other investors at P119.50 per share through a private placement undertaken last February, raising about P733 million in proceeds.

SEC chairperson Lilia R. Bautista, for her part, said the PSE cannot just revert its shares to the PSE unless there was an agreement they could return the shares.

"They can always sell it in the market. We’re glad that GSIS invested at a time we needed them but just like any investor, they can buy and sell anytime they want. We welcome the wider participation if ever they are going to sell to the public," Bautista said.

Bautista expressed confidence that the PSE can work out whatever problems it is going through. "There are disagreements but I think they could still sort it out. When the new management is in place, this would hopefully set the direction for the PSE," Bautista said.

The GSIS said it would pull out its investments in the PSE only when it has secured the approval of the local bourse.

In a statement issued Monday, the GSIS said it has not returned the shares yet to the PSE as it is still awaiting the approval of the exchange.

Apart from GSIS, other institutional investors that subscribed to PSE shares through the private placement were the PLDT Beneficial Trust Fund, San Miguel Corp. Retirement Fund, Kim Eng Investment Ltd. and KE Strategic Pte.