New leadership plans changes in PSE trading, merger of floors

Manila Times

Monday, April 10, 2006

New leadership plans changes  in PSE trading, merger of floors

By Cai U. Ordinario, Reporter WITH the elections over, the Philippine Stock Exchange’s (PSE) new set of officers are gearing up for a new trading system this year, and preparing for the merger of the Makati and Ortigas trading floors. Francis Lim, reelected PSE president, said the local bourse will require less than $4 million to implement a new trading system before the year ends. Financing for this effort would come from internally generated funds. “The Exchange is in the process of acquiring a new trading system to replace our almost 15-year-old trading system that will further minimize trading glitches and enable the Exchange to launch new products and services,” Lim said in a speech delivered during the annual stockholders meeting of the PSE last Saturday. The new trading system will be similar to online trading with investors, particularly foreign players, having more access to the actual trading done on the Makati and Ortigas trading floors. The PSE will also “vigorously” study the merger of the two trading floors under one roof at Fort Bonifacio. The property in Fort Bonifacio was donated by the Fort Bonifacio Development Corp. (FBDC) in November 2002. Plans for the Fort Bonifacio lot, however, have yet to be finalized, Lim said. Under the donation contract, the PSE owns the 1,282-square-meter lot for seven years and can build on the land in January 2008. On top of its house-cleaning campaign, the PSE is preparing for congressional deliberations on House Bills 5215 and 4237, which “is counter productive to what we’ve been doing in the stock market,” Lim said. The PSE plans to head to Congress to block the two bills, which separately aim to limit the stock market investments of state-run pension funds, Government Service Insurance System (GSIS) and Social Security System (SSS). “We are moving heaven and earth to get foreign pension funds like CalPERS [California Public Employees Retirement System] to invest in our stock market. If these two bills become law, fund managers and foreign pension funds might use it as the very basis to junk our market,” Lim said. Also on the drawing board is the Exchange’s plan to expand the ownership base of the local bourse through the sale of additional preferred or common shares. The planned demutualization is mandated by the Securities Regulation Code of 2000. Lim assured the Exchange’s stockholders that the local bourse would comply with the rules set by the SRC, as widening the investor base would increase the stock market’s trading volume. He earlier said that the PSE will issue enough additional shares to cover the demutualization. At present, all the brokers in the Exchange own 52 percent of the PSE.