Public ownership of stocks rises

MANILA, Philippines - Public ownership of companies listed in the local bourse is increasing, the Philippine Stock Exchange (PSE) said.

In a recent study, the operator of the country’s only stock exchange said the free float level hit 33.4 percent as of end-March.

In contrast, shares in public hands represented 30 percent of total domestic market capitalization as of end-2011.

“The increase in the share of market free float represents an estimated additional P400 billion worth of shares being owned by the public shareholders,” PSE said.

“The figures show that not only are there lesser non-minimum public float (MPO) compliant companies, the program has also proved to increase the shares in the hands of public shareholders,” said PSE president and CEO Hans B. Sicat.

In November 2011, the PSE reinstated the MPO of 10 percent for listed firms to help improve liquidity and increase public participation in the local capital markets.

From 45 non-compliant companies as of end-2011, there are now only six companies (Philcomsat Holdings Corp., Southeast Asia Cement Holdings Inc., Cosmos Bottling Corp., Nextstage Inc., PAL Holdings Inc. and PNOC Exploration Corp.) have yet to meet the PSE’s requirement.

Numerous companies have complied with the rule through divestments by strategic shareholders, follow-on offerings or delisting. For instance, San Miguel Properties Inc., San Miguel Brewery Inc. and Metro Pacific Tollways Corp. opted to leave the PSE.

Under the public float rule, companies that fail to comply by the end of June 2013 shall be delisted from the PSE.

“By and large, the reinstatement of the MPO rule has achieved the goals both from the governance perspective and the objective to increase liquidity in the market,” Sicat said.

“Moving forward, we will continue to assess the optimal level of the MPO requirement for listed companies in line with industry standards and the needs of the market,” he added.

Securities exchanges in Hong Kong, Singapore and Thailand already impose minimum float requirements of between 10 percent and 25 percent.