PSE sees higher market activity

MANILA, Philippines - The Philippine Stock Exchange (PSE) said it expects more companies to raise funds through the equities market next year despite volatile market conditions.

“We’re quite hopeful and despite volatility, there would be a higher level of activity next year,” said PSE president Hans Sicat.

So far, five firms went public this year - Megawide Construction Corp., Puregold Price Club, Calapan Ventures, Cirtek Holdings Philippines and Touch Solutions.

To further boost liquidity of the stock market, Sicat said the exchange is working on measures aimed at encouraging corporations registered with the Board of Investments (BOI) to list on the exchange.

Under Executive Order 226, otherwise known as the Omnibus Investments Code of 1987, BOI-listed firms are required to offer for sale 10 percent or more of their total subscribed capital stock to the public within 10 years of registration with the agency. This rule is in exchange for the incentives BOI-registered firms get from the government.

The BOI, however, has been having a hard time implementing this ruling because of an interpretation by a former BOI governor that this ruling was merely directional.

In 2005, the PSE and the BOI agreed to facilitate the public listing of companies getting tax perks from the government. These companies include electric distribution utilities, power generation companies and oil refining firms.

Sicat said the exchange also sees more companies undertaking follow-on offerings to comply with the minimum 10 percent public float.

As of end-September 2011, 41 listed firms had public float levels below 10 percent. These include Eton Properties Philippines Inc., Tanduay Holdings Inc., PAL Holdings Inc., Petron Corp., Metro Pacific Tollways Corp., Filinvest Development Corp. and state-run PNOC Exploration Corp., among others.