Shenzhen bourse’s investment in PSE faces regulatory hurdles
By Krista A. M. Montealegre,
National Correspondent
THE ENTRY of Shenzhen Stock Exchange into the Philippine Stock Exchange (PSE) faces regulatory hurdles ahead of the plan of the local bourse to tap the equities market.
“On the investment, we are not quite sure if they can meet the timetable kasi for them when they invest internationally, they need the approval of their (Securities and Exchange Commission),” PSE President and Chief Executive Officer Ramon S. Monzon said in an interview last week.
The PSE official announced in October that it is wooing its counterpart in China to invest in the local stock market, a move that may set the stage for the establishment of a Manila-Shenzhen trading link that will give Chinese investors access to shares listed in the Philippines and vice versa.
“May timetable kaming hinahabol so we’re trying to see how we can work that out,” Mr. Monzon said.
The Philippine SEC cleared the P3.16-billion stock rights offering (SRO) of the local bourse involving the sale of up to 11.5 million shares priced at P275 apiece. The deal is set next month.
Of the net proceeds, P1.58 billion will “(service) future corporate debt accessed through bridge financing” for its acquisition of Philippine Dealing System Holdings Corp. (PDSHC).
The PSE has already taken term loan facilities from BDO Unibank, Inc., Bank of Commerce, Metropolitan Bank and Trust Co. worth P1.15 billion, for the acquisition.
The SRO is a necessary step in the PSE’s acquisition of PDSHC, as it will bring down broker ownership to less than 20%. Bringing down the ownership of trading participants in the local bourse is a key feature in securing the SEC’s approval for the merger.
SEC approval for the PSE-PDSHC merger is one of the final steps in closing the deal that began back in 2013, when the PSE proposed to merge the two markets for synergies in operations. To recall, the Philippine Competition Commission approved the merger last December 2017.
The remainder of the SRO proceeds will be used for product development and working capital requirements, as the PSE moves to its new headquarters in Bonifacio Global City, Taguig by the first quarter of 2018.
