Down memory lane

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The Old Headquarters and Trading floor of the PSEi in Ayala Tower One in the Makati Central Business District. —

For years, the Philippine Stock Exchange, Inc. (PSE) had two separate trading floors: one in PSE Tektite Building in Ortigas Center and another in Ayala Tower One in Makati City. But starting late last month, the bourse has one unified trading floor in a new headquarters in Bonifacio Global City (BGC), in Taguig City, a symbolic turning point.

“As we move to our new office at the Bonifacio Global City, we shall embark on recording new history for the stock market and for our country,” Jose T. Pardo, chairman of PSE, announced during the final closing bell at the trading floor in Ayala Tower One.

PSE was incorporated in 1992, the same year Manila Stock Exchange, which was established in 1927, and the Makati Stock Exchange, which arrived in 1963, issued a joint declaration on their unification under PSE, for the purpose of hastening the development of the capital market

But it wasn’t until 1994 that PSE was granted the license to operate by the Securities and Exchange Commission. Before the end of that year, a major modification was made to the PSE Composite Index, the precursor of the bellwether Philippine Stock Exchange index (PSEi). It was now calculated based on its own set of components, which was increased to 30.

In 1996, the Banking and Financial Services Index was launched to reflect the financial environment. An All Shares Index including all listed companies was also introduced. Both indices began with a base value of 1,000.

In 2001, PSE transitioned from a nonstock, member-governed entity into a shareholder-based organization. In 2003, its shares were listed by way of introduction, opening at P100 per share and reaching as high as P252.50 before settling at P200 by the end of the year. The following year, PSE invested in the Philippine Dealing System Holdings Corp., the holding company of the fixed-income exchange, which serves as an alternative market for raising funds.

Listed companies saw major changes in 2006. They were now categorized according to their major source of revenue. PSE also changed how it selected the companies to be included in the index. Companies had to have, among others, a liquidity or average daily trading value of at least P5 million and a volume turnover ratio of at least 10%. It was also this year that the PSE Composite Index was renamed PSEi.

How companies were listed by way of introduction was revised in 2010. Applicant companies must now have, among others, a fairness opinion and valuation report on the pricing of their securities issued by a third party financial institution. And in an effort to enhance the quality of PSEi, PSE, in 2011, began requiring companies to meet the following criteria: having of a free float level of at least 12%, being one of the top 25% companies in terms of median daily value in nine out of a 12-month period, and ranking high in terms of full market capitalization.

PSE EDGE, the mobile application of the bourse’s disclosure platform, was unveiled in 2014 to give investors real-time access to disclosures and notices. Both Android and iPhone users can download it for free. In 2015, the bourse made the shift to a new trading system, PSEtrade XTS, which utilizes the xStream Technology of Nasdaq, an American stock exchange and is capable of handling large trading volumes. And to formalize its transfer to its new headquarters in BGC, PSE purchased office units on One Bonifacio High Street.