FMIC eyes P3-B ETFs

MANILA, Philippines -  First Metro Investment Corp. (FMIC) of the Metrobank Group is eyeing to list about P3 billion worth of exchange traded funds (ETFs) in the Philippines and Hong Kong in the second half of this year.

FMIC president Roberto Juanchito Dispo told reporters on the sidelines of the company’s Philippine Economic Briefing yesterday that they would be ready to list the ETFs at the Philippine Stock Exchange (PSE) by next month after it completes documentary requirements this week.

He said they are also studying the possibility of holding a dual listing at the Hong Kong Stock Exchange two to three months after the Philippine ETF listing.

Dispo said they expect higher demand from HK as it already has a mature market for ETF.

“We are also studying the possibility of doing a dual listing in HK because HK has mature global institutional investors that are familiar with ETF structure. This is the country’s first ever ETF that would allow a lot of institutional investors to invest in the Philippine equity market without directly buying individual stuff but buying the index through the ETF,” he said.

He said they have also decided to raise their initial authorized capital for ETF listing to P3 billion from the earlier announced P1 billion.

“Our initial authorized capitalization is P3 billion. Early part of this year, we only applied for P1 billion, midstream we decided to increase it in anticipation of a very strong demand from institutional and global investors,” he said.

In the next two to five years, depending on demand, Dispo said they could probably raise some P5 billion to P10 billion worth of ETFs.

Aside from ETFs, FMIC would also be participating in other forms of issuances such inflation-linked bonds, retail treasury bonds (RTB) of the National Government, and local dollar bonds.

Dispo said the company is also eyeing to participate in initial public offerings (IPO) of companies in the second half of the year.

He said they have submitted an unsolicited proposal to the Bureau of the Treasury on the inflation-linked bond structure.

“They (BTr) are reviewing in terms of suitability to the Philippine local capital market because sometimes we have a situation where inflation may even actually be lower than one being linked that may impact on the structure,” he said.

“Our proposal is more of a program where they can issue by tranches. Hopefully, it would be done within the year,” he said.

For RTBs, he said the government may also be considering issuing 10 or 15-year tenor bonds with issue size of some P100 billion depending on the fiscal requirement of the government.