PSE eyes higher PDS stake

MANILA, Philippines - The Philippine Stock Exchange, Inc. (PSE) hopes to acquire more shares in the Philippine Dealing Systems Holdings Corp. (PDS) as part of the planned merger of the two exchanges.

The PSE operates the local bourse while PDS operates the Philippine Dealing Exchange Corp., the country’s secondary market platform.

The two exchanges are moving to consolidate to offer additional value to issuers, investors, and other market participants at various levels. 

PSE president Hans Sicat said the exchange is targeting to sign more share purchase agreements (SPA) within the coming weeks covering the acquisition of shares in the PDS.

To date, the PSE has signed SPAs with four shareholders of PDS, the Bankers Association of the Philippines, the Finex Research and Development Foundation Inc., Whistler Technology Services Inc., and Insular Investment Corp.

These four shareholders have a total combined ownership in PDS of 40.06 percent while the PSE’s stake is at 20.98 percent.

“We are optimistic and excited about the benefits that this landmark transaction can bring to the market and we appreciate the support from all the stakeholders,” he said.

Other PDSHC shareholders that have expressed intention to sell their shares to the PSE include the Singapore Stock Exchange, the Philippine America Life and General Insurance Co., the Social Security System, the Investment House Association of the Philippines, Golden Astra, Tata Consultancy Serves Asia and Computershare Technology Services.

The completion of the purchase by PSE of PDS shares is subject to the approval of the Securities and Exchange Commission (SEC).

Sicat expressed hopes that the corporate regulator would support the merger, saying that it would deepen the Philippine capital market and bring this at par with the global markets.

“We have had numerous discussions with the Department of Finance, the BSP, and the SEC on this matter. We look to them to support this process of consolidating the equities and fixed income exchanges which will further align the Philippine capital markets with the global markets,” he said. 

But the SEC is still studying the planned merger before it grants PSE’s request for an exemptive relief to own more than 20 percent of an exchange.

Under the Securities Regulation Code, no single industry or business group should own more than 20 percent of an exchange. PSE is seeking an exemption from this rule.