Buys BAP-held 28.9% stake; to merge equity, securities markets
The Philippine Stock Exchange (PSE) has reached an agreement with the Bankers’ Association of the Philippines (BAP) to buy the latter’s 28.9 percent stake in Philippine Dealing Systems Holdings Corp. (PDS) to allow the merger of the country’s equities and fixed-income market trading systems.
The transaction, valued at P650 million, is expected for completion on or before December 29. Both parties are currently conducting due diligence and finalizing the agreed-upon terms and conditions of the deal.
With the acquisition of BAP interests, PSE will now hold 100 percent of PDS, amounting to P2.25 billion. PSE has long been courting a reluctant BAP to acquire its interests in PDS to complete the PSE and PDS merger.
The PDS is the holding firm of corporate fixed-income securities trading platforms Philippine Dealing and Exchange Corp. (PDEX), Philippine Depositary and Trust Corp. and Philippine Securities Settlement Corp.
Before the acquisition, PSE owned 20 percent of the PDS while the other stakeholders were BAP, Singaporean Exchange Ltd., and the investing public.
The PSE is looking at transforming the system of the PDS into a “true auction market” in selling bonds to raise participation from traders and regulators across the table. The merger also brings the local financial market into more competitive terms with markets elsewhere in the region, where Vietnam now remains as the only country without an integrated equities and securities market system.
For the first half of the year, the PSE saw an increase in its net income by 34 percent to P570.26 million from P425.55 million a year ago. Revenues were likewise up by 27.6 percent to P909.49 million due to the 109.1-percent advance in listing-related profits, amounting to P575.77 million.
Companies that listed in the stock market so far this year include the listing by way of introduction of Trans-Asia Petroleum Corp., Top Frontier Investment Holdings Inc., and the initial public offerings (IPO) of Double Dragon Properties Corp and Century Pacific Food Inc.
Four other firms are planning to debut in the stock exchange within the year: Platinum Group Metals Corp via a backdoor listing through Southeast Asia Cement Holdings Inc., as well as the planned IPOs of Rustan’s high-end retailer SSI Group Inc. at P12 billion, Samsung memory chip supplier Phoenix Semiconductor Philippines Corp. at P2.65 billion, and residential property developer Company of Friends Inc. (Pro-Friends) at P7.7 billion.