12% float set for PSEi stocks; bourse to ease listing rules, too

The Philippine Stock Exchange is bent on enforcing a 12-percent minimum public float as a prerequisite for top companies to merit a slot in the main-share index during the bourse’s next review this September.

In a forum organized by The Asset magazine, PSE president Hans Sicat also said the bourse was working to ease listing rules to attract more companies to go public.

The 12-percent minimum public ownership now required for inclusion in the PSEi is higher than the across-the-board 10-percent public float needed to remain listed.

Sicat said these initiatives would be part of the PSE’s bid to address limited liquidity—identified as one of the two major issues hounding the market. The other issue, which Sicat said the PSE would address in order to attract more investors, was the perceived lack of good corporate governance.

“As a result, all our efforts this year are really focused on driving these two major themes,” Sicat said.

In increasing liquidity, Sicat said the initiative to integrate the equities markets of five Southeast Asian economies should also help. “That will make it easier for retail investors to get equities, buy and trade in their local currency.”

The top 30 companies in the country will be among those to be promoted during an upcoming Southeast Asian equities cross-trading platform, which is targeted to start in the first quarter of 2012.

But if only to remain listed, the minimum public float requirement is 10 percent. Sicat said it was a good thing that many companies were now encouraged to undertake follow-on equity deals to meet such requirement. Still, there are about 45 companies that fall short of this minimum public float.