They say you can tell a man’s passion by the way he speaks about the topic of his choice. Listening to Hans B. Sicat give a recap of what he has done since being installed as the president and chief executive officer of the Philippine Stock Exchange (PSE) on January 2011, it is indeed plain to see that his passion lies in continuously helping transform the local bourse into the best that it can be.
“I guess from three years ago, the big difference is that you see a fairly resurgent Philippine economy, along with an extremely active capital market,” Sicat says.
He further breaks down the changes he has since implemented into three: structural, operational and adopting a medium-term strategy for the exchange.
He explains structural changes include extended trading hours and the focus on updating technology into PSE Trade, which is the same trading engine that the New York Stock Exchange (NYSE) uses. The new technology removed physical constraints especially with a much bigger volume of trades, which the old one could not handle. “In 2011 we were trading at an average of about P5.5 billion a day. In 2013 we were trading at about P10.5 billion average per day.” What is even remarkable, he adds, is the record number of transactions on the exchange, with values largely unprecedented, citing 2012 where the PSE was able to raise P219 billion or the equivalent of $4.2 billion dollars.
Sicat says the PSE’s main mantra is to be a capital markets catalyst. The team is doing this by constantly trying to increase the number of types of transactions, the menu of options of products on the exchange and in the process, deepen the business profile of the Philippines.
He cites another example of “PSE firsts,” such as the launching of an index futures product, currently traded in Singapore. The exchange has also added new services such as an online service bureau, where an internet system for brokers and dealers is privately labeled or customized, and launched the “PSE Edge,” a new reporting system for companies for updating information and official disclosures, and effect prompt and full compliance from them.
Sicat says he really wanted to send a strong signal that he means business. “When I first came in, within two months of me sitting as CEO, we delisted about five companies which really should’ve been delisted years ago but had retained expensive lawyers who managed to keep them there for the longest time possible.”
Another compliance issue the PSE has been dealing with is the minimum public float, which Sicat says they managed to clean up about a year ago. “We told them (companies) non-compliance with the minimum public offer rules can actually get you automatically delisted. In 2012, there were about 47 companies found violating this rule. By the end of the year, there was one company, the PNOC-EC, which we forcibly delisted.”
Another important structural change, Sicat says is on the governance side. “We’re currently working with the Securities and Exchange Commission (SEC) for the establishment of the “ Capital Markets Integrity Corporation.” This, he says, is an industry watchdog with oversight functions for brokers and dealers. While the PSE owns the agency, it is run by independent directors who report directly to the SEC.
He says the advantage of CMIC is “it eliminates the view of conflict of interest between brokers who are also owners of the exchange, and regulators, too.” Along with this, the PSE had also acquired a state-of-the-art surveillance system from the Korea Exchange, which has the ability to monitor and detect yellow or red flags for any misbehavior going on in real-time, and thus promote integrity.
Apart from the multitude of changes Sicat has managed to put in place, he also put up the Bell Awards in 2011, which gives recognition to both companies and brokers.
Despite these numerous changes, Sicat says his mission is far from over. The biggest challenge for the Philippine corporate markets, he says, just lies ahead with the upcoming Asean integration in 2015. This is a big thing, he points out, because “most of the corporates have got to have both a strategic and operational view that I am working on right now, so they will remain competitive beyond the opening up of markets.” He believes the government must take a more active approach. In particular, he says, “policy-making leadership from the national government doesn’t seem to talk about this as one of the most important things, and therefore consciousness on this matter with the man-on-the-street is not very high.”
With a million and one things to do on his wish list for the exchange and capital markets development, one would wonder if this energetic CEO still has the time to pursue his other interests. With a smile, he says he does, with running and exercise ranking very high on his list. “I’m an extremely physically active person, I grew up as a tennis player, although nowadays I run more than I play tennis.” He hits the gym every day and tries to do his share in helping the environment on a personal capacity. He also makes sure to have quality time with his family, especially because he has only one remaining with him, as the two others have gone to study college abroad. They also go scuba diving as a family whenever they can, with all his kids getting their certification when they were still young. He also engages with the social media via his twitter account every now and then, to get a feel of what’s happening outside his realm. At the end of the day, what’s important, Sicat says, is to maintain the focus and integrity in all aspects of your life—whether it be in your personal or work life. After all, it will be what people will ultimately remember you for.