PSE nears integration of stock, bond markets

By integrating the equities and fixed income exchanges, the PSE seeks to provide investors with a facility to trade fixed income, equities and other products in a unified marketplace as well as a single venue in the country for listing and capital-raising to make it easier for companies to tap both equities and debt markets.

More PDS shares to be acquired

MANILA, Philippines — The Philippine Stock Exchange Inc. expects to strike deals with more shareholders of the Philippine Dealing System Holdings Corp. (PDS) this month, on top of the recently signed P2.4-billion agreements that are part of the PSE’s plan to acquire up to 100 percent of the holding company that owns the Philippine Dealing & Exchange Corp. (PDEx).

“We are targeting to sign additional share purchase agreements (SPAs) within the month,” PSE president and CEO Ramon Monzon told The STAR.

He, however, said attaining the goal of consolidating the equities and fixed income exchanges could be achieved even without the PSE having 100 percent ownership in PDS.

“It is possible to consolidate both exchanges without full ownership of PDS. We only need a majority stake of 51 percent to do this,” he said.

At present, the PSE can have a total of 84.44 percent ownership of PDS based on recently signed SPAs and term sheets with various shareholders amounting to P2.4 billion.

The PSE late last month signed a term sheet with the Bankers Association of the Philippines for its shares and those owned by BAP Data Exchange Inc. and certain member-banks for an equivalent of 28.83 percent of PDS.

A term sheet was likewise inked with Mizuho Bank Ltd. for its 0.08-percent stake.

Also signed were SPAs to acquire Singapore Exchange Ltd.’s 20-percent stake, Whistler Technologies Inc.’s eight percent, San Miguel Corp.’s four percent, Investment House Association of the Philippines’ 0.65 percent and Golden Astra Capital Inc.’s 0.36-percent shareholding in PDS.

The PSE likewise entered into an SPA with the Financial Executives Institute of the Philippines Research and Development Foundation for shares of stocks in PDS equivalent to 1.54 percent.

Overall, PSE will be purchasing a total of 3.97 million PDS shares from these shareholders for P2.38 billion at an acquisition price of P600 per share.

The shares equivalent to 63.46 percent will be added to the PSE’s existing 20.98-percent stake in PDS.

The PDS is the holding company that owns the PDEx, the operator of the fixed income exchange. It also owns the Philippine Depository & Trust Corp. which serves as the depository for equities and fixed income securities.

Monzon earlier said the signed agreements brought the PSE closer to achieving its objective of consolidating the equities and fixed income exchanges and realizing the synergies and efficiencies from a unified setup.

The PSE plans to acquire up to 100 percent of PDS to align the country’s capital market with other markets globally, which have a single exchange structure for fixed income and equities.

By integrating the equities and fixed income exchanges, the PSE seeks to provide investors with a facility to trade fixed income, equities and other products in a unified marketplace as well as a single venue in the country for listing and capital-raising to make it easier for companies to tap both equities and debt markets.

The PSE said unifying the capital markets would also enable the exchange to develop new products and services in light of the operational efficiencies and synergies expected to result from the vertical integration.

Further, it will provide a more efficient integrated market surveillance and monitoring for both equities and fixed income markets for investor protection.