MANILA, Philippines - The Philippine Stock Exchange (PSE) is on target to raising the minimum public float requirement to at least 12% by September in line with its goal to align itself with global standards, the top bourse executive said yesterday.
PSE president and chief executive officer Hans Sicat said the exchange is easing its listing rules to encourage more people to invest in the equities market.
The move is expected to bring about more follow-on offerings, and even out free float levels across all listed companies, thus making more shares available to the public.
Sicat said the indices will also be reconstituted on the basis of market capitalization instead of free float.
The index recomposition periods have also been moved to March and September yearly from the current May and November schedules.
To enjoy continued listing, the listed firm must rank among the top 25 % in terms of median daily value in nine out of the 12-month period in review from the current P5 million average daily value.
The PSE also noted that the ranking shall no longer consider the sector representation of companies and shall treat eligible companies equally. Currently, final selection of companies is done in two stages with the two highest-ranked companies from each of the six sectors filling the first 12 slots to ensure sector representation. The remaining slots will then be occupied by the 18 highest-ranked companies from among the other qualifiers.
To be eligible for the sector indices, common stocks of the company must rank among the top 50% in terms of median daily trade per month in eight out of the 12-month period in review.
To further boost market liquidity, the exchange is proposing to relax the one-year operating history requirement under the secondary board listing rules to allow more petroleum and renewable energy companies to list on the bourse.
The PSE is also reviving the rules on listing by way of introduction (LBI) to include the independent fairness opinion requirement for the listing applicant’s offer price.
Sicat said the changes would allow the PSE indices to complement an ongoing initiative by the ASEAN Exchanges to form the “ASEAN Stars” or 210 ASEAN stocks representing blue chip stocks of ASEAN bourses.
ASEAN Exchanges is another main project of the PSE in collaboration with Indonesia, Malaysia, Singapore, Thailand and Vietnam. The collaboration aims to promote the growth of the ASEAN capital market by driving cross-border collaboration, streamlining access to ASEAN, creating ASEAN centric products, and implementing targeted promotional initiatives.