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PSE, PDEx aiming for Oct. merger

Posted on July 21, 2014

AFTER SEVERAL DELAYS, the planned merger of the country’s equity and fixed-income bourses could finally take place this October.

In an interview last Friday, Philippine Stock Exchange (PSE) President and Chief Executive Hans B. Sicat said the parties involved were now working on setting “realistic objectives” in order to close the deal.

Bankers Association of the Philippines (BAP) President Lorenzo V. Tan told BusinessWorld last month about the October target date.

Asked to comment if the time frame -- about three months -- was viable, Mr. Sicat replied: “Maybe. We’re trying to do that. We’re not being too ambitious by trying to set realistic objectives.”

Both parties, he said, are no longer “trying to find a global solution” with regard to the planned merger.

“I think the idea is that we can reach an agreement on a few items and we’ll go ahead, do that, and take that as part of the deal. Then we can move on and talk to the other stakeholders,” the PSE chief said.

“We’re talking to individual stakeholders one at a time. We’re dealing with BAP right now.”

The PSE and the Philippine Dealing and Exchange Corp. (PDEx) both confirmed last month that they had resumed merger talks.

The PSE wants to buy out Singapore Exchange Ltd. (SGX) and the BAP from the Philippine Dealing System Holding Corp. (PDS Group), which is the holding firm of the PDEx -- the country’s trading platform for corporate bonds, government treasury papers and foreign exchange.

The BAP, SGX and the PSE hold 25%, 20% and 20%, respectively, of the PDS Group. The rest, meanwhile, is owned by minority shareholders.

Negotiations were originally scheduled to be concluded last August but were moved to November. They were again pushed back to June this year, with valuation said to be a sticky point.

Also hanging over the planned merger is an anti-monopoly suit filed before the Supreme Court by former legislators Aquilino Q. Pimentel, Jr. and Luis R. Villafuerte, Sr., former Budget Secretary Benjamin E. Diokno and former national treasurers Caridad R. Valdehuesa and Norma L. Lasala.

The merger is expected to boost the Philippines’ efforts to meet requirements under a cross-border trading platform linking Southeast Asian stock markets in time for ASEAN economic integration next year. -- DJM