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To merge or not to merge

/ 10:55 PM March 19, 2013

Former President Fidel V. Ramos forced the union of the Manila and Makati Stock Exchanges two decades ago, with favorable results as we now have a single bourse, the Philippine Stock Exchange. What Finance Secretary Cesar Purisima wants to see under the term of President Aquino is to unify the bond and equities market.

The PSE is willing to again take a look at this consolidation proposal but what has changed compared to more than a year ago when the unification was first proposed is that the local bourse now holds a provisional license to operate a securities depository under the Securities Clearing Corp. of the Philippines (SCCP) and is determined to operate it as such—independent from the existing platform under the Philippine Dealing System, which the PSE is also part of.

“The dynamics have changed in terms of what or what doesn’t makes sense. It’s logical but we have to evaluate this as a business and we have to earn for our stockholders,” PSE president Hans Sicat said at a press briefing. He added that the PSE would probably see a clearer direction on this in the next few weeks.


The unification and the much-debated setting up of the PSE’s own securities depository system, Sicat said, were “not mutually exclusive initiatives.”

“Even as we’re pushing for depository project, reviewing a consolidation strategy can obviously happen. It needs to make sense for all the users of the platform.”

That, folks, is the most diplomatic way to put it. Doris C. Dumlao

PH on Bloomberg’s radar

With the country’s economic prospects looking brighter by the day, it’s of little surprise that some of the most distinguished names in the global business scene are trooping to the Philippines to see and feel for themselves the progress being made at ground level.

The latest big-hitting visitor was Bloomberg L.P. chair and CEO Peter Grauer, who came to the country as part of an Asian tour to check on the financial service provider’s businesses in the region.

Grauer—who took over the reins of the New York-based business news behemoth when its owner and founder became the Big Apple’s mayor—met with Finance Secretary Cesar Purisima last Monday and he had nothing but praise for the head of the Aquino administration’s economic team. (He was particularly struck by Purisima’s dogged lobbying for the country to attain the coveted investment grade from international credit ratings firms, he said.)

On Tuesday, Grauer hosted lunch at the Makati Shangri-La for some of the leaders of the country’s biggest corporations. The star-studded list of invitees included Ayala Corp.’s Jaime Augusto Zobel de Ayala, the SM group’s Teresita Sy, San Miguel’s Ramon Ang, the Aboitiz group’s Jon Ramon Aboitiz, Petron vice chair Eric Recto, GMA Network’s Felipe Gozon and First Metro Investment Corp.’s Roberto Juanchito Dispo.


Apart from selling more Bloomberg terminals to the booming local market—each at a monthly cost of a little more than $1,700—Grauer was also pushing for collaborative efforts with local market players and regulators to develop the Philippine capital markets.

This is especially important for Bloomberg since the Philippines is probably the only market in the world where it is not the trading platform of choice for fixed income securities. (Philippine Dealing and Exchange Corp. chose to partner with Bloomberg’s rival Thomson Reuters for this.) Daxim L. Lucas

Angat deal moves forward

Some industry insiders are doubting whether the state-run Power Sector Assets and Liabilities Management Corp. will still be able to turn over the 218-megawatt Angat hydropower plant to Korea Water Resources Corp. (K-Water) following some concerns raised by the foreign firm.

Our sources said that K-Water had expressed concerns over the government’s move to bid out the operation and management of Angat Dam’s auxiliary turbines 4 and 5, which have a total generation capacity of 28 MW, under a public-private partnership arrangement. These concerns had allegedly caused the delay in the turnover, which was targeted to happen last month.

One of the primary concerns of K-Water, an insider claimed, was the safety and security of operating the Angat facility with another entity, which would be the winning bidder that would operate the auxiliary turbines 4 and 5. There are concerns as well on the system integrity considering that there are shared facilities such as having only one control room for all the facilities. Another issue is the possible impact on the revenues of K-Water as it has to share the water rights with another group.

One positive-thinking insider, however, noted that the turnover could finally push through within the year after some clarifications and reassurances made by the government. PSALM head Emmanuel R. Ledesma himself expressed confidence that the transaction will still push through, noting that the government and K-Water “are discussing in good faith for the soonest turnover… Given the continued interest of K-Water and earnest discussions between the parties, we are confident any issue will be threshed out to the mutual satisfaction of the parties.” Amy R. Remo

Citi’s new consumer chief

Coinciding with the International Women’s Day on March 8, Citigroup has appointed a homegrown Filipina talent—Bea Teh-Tan—as its new consumer business manager for the Philippines replacing Latino expat Sergio Zanatti who will be the new consumer business manager for Malaysia.

Tan was previously head of Citi’s credit payment products managing the consumer finance portfolio, including credit cards and personal loans for the country. She joined Citi in 1998 and has held a variety of roles, including strategic planning head as well as head for cards marketing, sales and distribution. She has been instrumental in driving the growth of Citi’s consumer banking business by retaining its top market position in credit cards.

This lady was earlier recognized as one of the most promising young talents in the financial services industry by The Asian Banker. She was cited in 2008 as one of the best bankers under the age of 40 in Asia Pacific. She is an alumna of De La Salle University with a bachelor’s degree in commerce, major in economics and business management. Doris C. Dumlao

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TAGS: Angat hydropower plant, Bea Teh-Tan, Biz Buzz, Bloomberg, bond and equities market, Business, Citigroup, column, merger, Power Sector Assets and Liabilities Management Corp.
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