PSE urges more SMEs to list

By Richmond Mercurio, The Philippine Star

Posted at Dec 22 2014 07:55 AM | Updated as of Dec 22 2014 03:55 PM

MANILA - The Philippine Stock Exchange (PSE) wants more small and medium-sized enterprises to list next year so that these emerging firms could take advantage of the country’s robust economy.

The operator of the country’s stock exchange hopes to reinforce the roster of companies comprising the Small, Medium and Emerging (SME) board of the exchange in 2015 following the successful listing of two companies on the SME board this year.

Property company DoubleDragon Properties Corp., which listed on April 7, raised P1.16 billion from its initial public offering while technology firm Xurpas, Inc., which listed on Dec. 2, raised P1.37 billion from its offering.

Shares of both firms skyrocketed and hit the ceiling price in their respective market debuts.

“We hope that the market’s overwhelming response to the share sale of Double Dragon and Xurpas will encourage more SMEs to consider listing at the exchange,” said PSE president and chief executive officer Hans B. Sicat.

The PSE requires a company to have an authorized capital stock of at least P100 million, of which a maximum 25 percent must be subscribed and fully paid, to be listed on the SME board.

Likewise, the company should have a cumulative earnings before interest, taxes, depreciation and amortization (EBITDA) of at least P15 million, excluding non-recurring and extraordinary income and/or loss, for the last three fiscal years immediately preceding the application for listing.

Lastly, the company must have a positive EBITDA in at least two of the three full fiscal years immediately preceding the application for listing, including the fiscal year immediately preceding the application.

“As the economy experiences prolonged high growth levels, it is inevitable that the gains become more inclusive even at the corporate level. The companies that listed in the SME board this year supports this observation as we see smaller-sized and emerging companies starting to seek capital market-based funding to expand their operations,” Sicat said.

The PSE simplified its listing board structure in 2013 to help accommodate more small, medium and emerging companies into the stock market while enhancing the governance requirements to further investor protection.

To support its push for SME listings, the PSE said it has conducted seminars and discussions with the Development Bank of the Philippines (DBP), start-up technology firms, and small and medium enterprise owners.

The PSE has already discarded plans of hitting its P200-billion target capital raising this year as several deals originally set in 2014 would likely push through next year.

Sicat, however, has said P200 billion will once again be its target for next year as it is likely to end below that figure this year.

Read more on Philippine Star.