HONG KONG May 10 New trading products, better
corporate governance and improved tax rules will help alter the
perception that the Philippines Stock Exchange is a small,
illiquid choice among South-East Asia's markets, its president
Hans Sicat said.
"In the past, the Philippine market was viewed as an old
boy's club, but that is changing. Today, deals of the size of $1
billion can be easily done," Sicat told IFR, a Thomson Reuters
publication, in a telephone interview.
The market had been on a roll in the last two years as the
economy has improved and the country achieved investment-grade
status, yet much more was required from both regulators and
issuers for Philippines to continue to attract capital, he said.
Average daily traded volume on the exchange rose to 10.6
billion pesos ($240 million) in 2013 from 5.5 billion pesos in
2011, after the Philippines strictly implemented the minimum 10
percent freefloat rule for listed companies in 2012. The
market's capitalisation rose 18 to 20 percent, Sicat said.
There is also more participation from domestic investors.
Foreigners were responsible for nearly 65 percent of average
daily traded volume 10 years ago, while trading volume now was
split equally between local and foreign investors, he noted.
The decision of the three major rating agencies to boost the
Philippines to investment grade last year had helped as it "has
opened the doors for many funds, which don't invest in
non-investment-grade paper," Sicat said.
Despite the rising volumes, the Philippines remains the
"baby" market among the big five ASEAN economies. Sicat said
there were hopes that more family-owned companies would break
their reliance on bank borrowings and consider the exchange.
The PSE president said more non-conglomerate companies, such
as D&L Industries, DoubleDragon Properties and
Century Pacific, had listed, setting an example for
"These [newly listed companies] are run by bright, young
people, who are a lot more sophisticated," Sicat said.
The PSE is also encouraging firms in capital-intensive
growth sectors, such as renewable energy and oil companies, to
list under new rules, which exempt them from the usual
three-year profit record.
Dual listings by foreign companies was another way for the
PSE to boost the market's breadth, Sicat said, adding that some
Chinese companies had shown interest in listing in the
Some companies with mining interests in the Philippines and
shares trading on the Toronto, Sydney and London stock
exchanges, are interested in listing on the PSE, Sicat added.
Last year, fruit producer Del Monte Pacific became the first
Singapore-listed company to achieve a dual listing on the PSE.
For the full interview, please see: www.ifrasia.com
(Editing by Clarence Fernandez)