THE PHILIPPINE Stock Exchange (PSE) saw a 21-percent drop in net profit last year to P683 million as listing-related income slumped alongside the tumultuous global market environment.
“Last year was a challenging year not only for the Philippine stock market but to the global equities market in general. Our local market was not spared from the backlash of China’s economic slowdown and the US Federal Reserve’s decision to start gradually raising interest rates. These developments affected both liquidity and capital market deals particularly in the latter part of the year,” PSE president Hans B. Sicat said in a statement.
Total revenues generated by the PSE, including operating revenues and other income, were down 15 percent to P1.4 billion.
Listing-related income, which made up 40 percent of operating revenues, declined by 41 percent year-on-year to P483 million. While capital-raising activities were higher, other listing activities arising from other market deals were slower compared to 2014.
The decline in listing-related income was tempered by higher trading-related revenues, including service fees derived by the Securities Clearing Corporation of the Philippines (SCCP), which grew revenues by 2 percent.
Despite a volatile stock market in 2015, the average daily turnover in 2015 managed to rise by 2 percent to P8.9 billion.
In 2015, total expenses amounted to P602 million, up 2 percent. Investments made by the PSE in its new trading system and its move to a new building contributed to the higher spending. The PSE is scheduled to transfer to the Fort Bonifacio Global City during the first half of 2017.
“A big part of the spending increase was due to investments that are being made by the company in line with its strategy of creating a bigger exchange offering more products and services. Despite these, we were able to manage our expenses to help mitigate the impact of slower market activity in our financials,” Sicat explained.
“We foresee a potential increase in capital-raising activities after the Philippine elections and we hope the volatility becomes more tempered as investors get more clarity on the impact of the global developments in our market,” Sicat said.
After a six-year run-up, the local stock barometer PSEi slipped by 3.85 percent to close at 6,952.08 in 2015.
“Volatility has persisted early in 2016 but we are hopeful that the country’s sound economic fundamentals will help temper these and will cause investors to continue having the Philippines in their investment radar,” Sicat added.
As of Feb. 23, daily average turnover at the local bourse was down by 31 percent to P6.2 billion from P8.96 billion last year. Doris Dumlao-Abadilla