PSE buys back P445M worth of shares

THE Philippine Stock Exchange, Inc. (PSE) has bought back P445.10 million worth of shares as part of its plan to reduce broker ownership to less than 20%.

In a disclosure posted Wednesday, the PSE said it purchased 2.419 million shares priced at P183.93 each. This is out of the P532.01-million buyback program it announced last August. The acquired shares will be booked as treasury shares.

The PSE has yet to reply to queries on how much broker ownership has been reduced after the share buyback program.

The bourse operator then requested for a one-hour trading suspension on Wednesday morning to allow investors to digest the material information.

The company’s compliance plan also includes the creation of 3.5 million preferred shares with a par value of P1 each. The preferred shares, which are non-voting, cumulative in payment of dividends, non-participating in any further dividends, non-convertible, can only be issued to brokers.

It has yet to secure approval from the Securities and Exchange Commission (SEC) for the creation of such shares.

PSE President and Chief Executive Officer Ramon S. Monzon earlier said the PSE will have to issue about P5 billion worth of new shares to comply with the single industry limit.

Latest data showed that trading participants own 26.44% of the PSE’s total shares, higher than the 20% industry limit set by the Securities Regulation Code. The law prohibits any industry or business group to “beneficially own or control, directly or indirectly,” more than 20% of the PSE’s voting rights.

The PSE has been trying to bring down broker ownership in the company in the previous years, as it sought to get the SEC’s nod in its then planned acquisition of the Philippine Dealing System Holdings Corp. The deal however is now unlikely to move forward after state-run Land Bank of the Philippines’ signified its interest in the acquisition.

Earlier this year, the PSE also implemented a real-time broker ownership monitoring mechanism through the trading system. This automatically prevented trading participants from placing a buy order for PSE shares should their accounts exceed the limit.

Shares in PSE slumped 1.73% or P3.10 to close at P176.50 each at the stock exchange on Wednesday. — Arra B. Francia