THE Philippine Stock Exchange (PSE) will launch three investment products this year in a bid to increase investor participation in the market.
Roel Refran, PSE chief operating officer, said the bourse will launch the following three products in 2017: dollar denominated securities (DDS), public-private partnership (PPP) firms listing and the Personal Equity Retirement Account (PERA).
For PPP securities, Refran said an applicant company that has been awarded a contract under the PPP scheme of the government (also called a concessionaire) should first complete a phase of the project before it can apply for a PPP listing to protect investors from risks arising from delays in the PPP processes.
Aside from meeting a number of criteria under PPP securities rules, said company or concessionaire may raise funds from the capital market only when it is already realizing cash flow and revenues, the PSE said.
For dollar-denominated securities, Refran said the exchange is positive that the first DDS issue will happen within the first quarter of the year, as DDS is attractive to the energy and consumer sectors based on preliminary formal discussions of the PSE with interested stakeholders.
“A lot of corporates are seeing if they can tap this” to fund their expansion programs, Refran said.
Fruit canner Del Monte Pacific Limited (DMPL) earlier raised its intent to issue the first DDS— about $360 million in size—in the first quarter.
Under the rules, before DMPL can offer DDS to the market, it must have two eligible brokers which have FCDU (foreign currency deposit unit) accounts for dollars and also have the right training and systems to operate and trade in dollars.
For PERA, Refran said the PSE is closely working with the Securities and Exchange Commission (SEC) to widen the “investible product list,” which details the allowable investments or security products where PERA account holders may invest in.
“We’re intersecting with the government to create interest in PERA. The SEC will issue the investible products list, we hope, in the next few weeks,” the PSE chief said.
Promulgated under Republic Act No. 9505, PERA is a “personal savings plan” that serves as an individual’s fund pool that can also have 5 percent tax breaks aside from the investments made from the account. The Bangko Sentral ng Pilipinas conducted a soft launch of PERA in December last year.
Rules for DDS and PPP securities may be accessed at the PSE website, while the framework for PERA can be seen in RA 9505 or the PERA Act of 2008.