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Friday, March 29, 2024

PSE to offer dollar-denominated securities trading

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The Philippine Stock Exchange said Tuesday it will soon launch dollar-denominated securities trading in the country.

PSE president and chief executive Hans Sicat said it would allow trading and settlement in US dollar of securities listed and quoted on the local bourse.

Sicat said the exchange would issue the guidelines for DDS trading for public comment. The guidelines would then be submitted to the Securities and Exchange Commission for approval this year.

Among the companies that may qualify for dollar-denominated securities are Philippine Long Distance Telephone Co., Del Monte Pacific Inc., Manulife Financial Corp. and Sunlife Financial Inc.

Sicat said DDS trading would provide issuers flexibility to meet their capital requirements. It will also provide alternative investment instruments for investors with US dollar deposits.

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PSE said with the launch of the new project, it planned to attract offshore investors and reduce currency risk exposure.

The re-introduction of DDS trading is one the new initiatives the exchange plans to implement this year to boost trading.

Sicat said this year, he was expecting earnings to be affected by the decline in average daily trade volume, which already dropped to P6.7 billion in the first two months from P8.96 billion in 2015.

Sicat said he expected trade volume to recover in the coming years, as the Philippines’ underlying economy remained strong.

“Philippine macroeconomy is very healthy versus Asian neighbors, which overtime should have us viewed as reasonable place to invest in or expand their businesses in,” Sicat said.

PSE is also finalizing the rules on infrastructure listing, in order to attract more initial public offerings in the market.

Sicat said the exchange might waive track record and profitability requirements for infrastructure companies with concrete infrastructure plans for toll roads, power plants and port projects. 

He said a similar waiver was granted to renewable energy companies in 2011.

Several infrastructure companies expressed interest in listing in the PSE once the rules were finalized.

Sicat said it was important for the exchange to set the rules for infrastructure listing, as several infrastructure projects would require massive funding over the next three years.

PSE registered a net income of P683 million in 2015, down 21 percent from 2014, as operating revenues and other income went down by 15 percent to P1.4 billion.

Listing-related income, which accounted for 40 percent of operating revenues, fell  41 percent year-on-year to P483 million.

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