THE Philippine Stock Exchange (PSE) plans to require companies going public to have a stability fund if they seeks to offer secondary shares.

PSE President and Chief Executive Officer Ramon S. Monzon said they are looking into requiring firms to have a stability fund worth between 10% to 15% of the base offer of their initial public offering (IPO) or follow-on offering (FOO).

“As you know there are no requirements now for stabilization funds for IPOs or FOOs, but because of this [Medilines Distributors, Inc.] issue, the PSE is seriously considering [it],” Mr. Monzon said in an interview with the ABS-CBN News Channel’s Market Edge on Thursday,

Shares of Medilines plunged 30% when it debuted at the PSE’s main board last week, despite its offer being 2.5 times oversubscribed.

It sold 550 million primary shares for P2.30 each, and its Chairman Virgilio B. Villar sold 275 million in secondary shares.

“Nobody can explain how can an oversubscribed issue close at the floor price on opening day when there’s supposed to be so much pent-up demand,” Mr. Monzon said.

He is scheduled to meet with the Capital Market Development Committee on Tuesday to propose a rule that would require a stability fund, which is deployed by issuers to support their stock price in the market for a period of time after listing.

“I will be proposing a rule change where we will require all companies that are doing an IPO, if there is a secondary component, meaning [if] shareholders [are] selling part of their shares, we will require them to have a stabilization fund,” Mr. Monzon said.

While the rule is subject to the approval of the committee, the PSE’s board and the Securities and Exchange Commission, Mr. Monzon said he hopes the rule will be in place by January or February next year.

Leviste-led Solar Philippines Nueva Ecija Corp. (SPNEC) will be listed on the main board of the exchange on Friday. SPNEC sold 2.7 billion shares for P1 per share, raising P2.7 billion for its solar power plant pro-ject. In a statement on Wednesday, its underwriter Abacus Capital and Investment Corp. said the offer was nearly two times oversubscribed.

Despite some IPOs delayed to next year, Mr. Monzon said the PSE expects to end the year with a record amount of funds raised from the capital market.

“We expect to close the year at about P234.48 billion, a record-high. So far, the record amount of capital raised for the PSE was in 2012 when we raised P228.3 billion,” Mr. Monzon said.

Local retail investors accounted for 33.1% of market participation, making up for the foreign investors that exited the market.

Mr. Monzon said he hopes a short-selling platform will be approved by regulators to attract foreign investors back into the country.

“I personally am convinced that having a short-selling platform would encourage foreign investors to return to the market because it will allow them to hedge their investments instead of exiting when things go bad,” Mr. Monzon said.

In 2022, the PSE is hoping to see more mining firms and small-, medium-sized enterprises go public. Mr. Monzon said he has “budgeted” for 10 IPOs next year.

Real estate firm Haus Talk, Inc. is slated to be the first to list in 2022, scheduled for a Jan. 17 listing. Meanwhile, the Figaro Coffee Group, Inc. will make its market debut on Jan. 24.

The first energy-focused real estate investment trust, Citicore Energy REIT Corp., is also looking to list at the PSE next year. — Keren Concepcion G. Valmonte

RELATED ARTICLESMORE FROM AUTHOR