More than 100 publicly-listed companies including San Miguel Corp. and its subsidiaries will be affected by the order of the Securities and Exchange Commission to increase the minimum public ownership of these listed firms to 25 percent.
Philippine Stock Exchange president Ramon Monzon said that of the 267 listed firms, 102 had public floats below 25 percent. Public float refers to the percentage of shares in the hands of public investors or those held by people apart from the company owners, management and insiders.
Monzon said he was supporting the SEC’s move to raise to 25 percent the MPO from the current 10 percent as this would significantly boost liquidity in the stock exchange.
“We have been pushing for this as an exchange, and we have following it up with the SEC,” Monzon said.
Under the plan, the SEC will allow the affected companies five years to comply with the 25-percent minimum public float.
SEC commissioner Ephyro Luis Amatong said in a recent interview that San Miguel group needed to sell the most shares to meet the 25-percent MPO. San Miguel’s public float is currently at 15.94 percent while its units have floats below 25 percent.
San Miguel Food and Beverage’s public float was only 11.24 percent while Top Frontier Investment Holdings Inc. has public float of 11.9 percent. Ginebra San Miguel Inc.’s public float is 22.3 percent.
Other listed companies with public float below 25 percent include Filinvest Development Corp. (10.7 percent), Eagle Cement (11.5 percent), LBC Express Holdings (15.4 percent), PAL Holdings Inc. (10.33 percent), Emperador Inc. (14. 9 percent), Rockwell Land Corp. (13 percent) and Vistamalls Inc. (10.3 percent).
BDO Capital president Eduardo Francisco said the SEC’s plan to increase the MPO would boost the liquidity in the stock market.
Francisco said that while the market index was stable at 7,800 to 8,000 level, the volume remained low compared to regional peers. The average daily trading value was only P5 billion to P6 billion this year.
Francisco said the five-year compliance period might be too long which could encourage some companies to comply with the MPO in the fifth year.
“It is too long. They all might do it on the last day,” Francisco said.
The SEC initially decided to increase the MPO to 25 percent in 2016 but shelved the plan as the stock market turned volatile.