The Philippine Stock Exchange will raise the minimum public float requirement on 30-member index stocks to 20 percent from 15 percent, a top executive said over the weekend.
Monzon said in a presentation in a recent forum the PSE would also revive the proposal requiring all listed companies to maintain a minimum public ownership of 25 percent.
He said these moves would improve market liquidity.
The Philippine Stock Exchange index or PSEi, which consists of the 30 largest and most active common stocks, serves as the barometer of the local market.
Companies that qualify for inclusion in the bellwether PSEi are those with a free float level of at least 15 percent, belonging to the top 25 percent by median daily value per month for at least nine of 12 months and are among the highest in terms of market capitalization.
Monzon said the PSE would implement the 20-percent minimum free float for PSEi member companies in the next index review in December.
This move could affect several PSEi-member firms including San Miguel Corp., AC Energy Corp. and Emperador Inc.
San Miguel’s public float is at 15.98 percent, while public ownerships of ACEN and Emperador stand at 15.9 percent and 15.01 percent, respectively.
All other listed firms are required to maintain a minimum public float of 10 percent. Companies planning to hold an initial public offering should have a minimum public float of 20 percent.
The PSE earlier shelved the proposal to increase the minimum public float because of market volatility.
Monzon said the market liquidity in the local bourse remained low compared to other exchanges in the Southeast Asian region.
Data showed the average daily turnover in the local stock exchange is about $130.6 million, compared to $573 million in Malaysia, $886.4 million in Indonesia, $1 billion in Vietnam, $1 billion in Singapore and $2.5 billion in Thailand.
The local market participation is also small relative to the Philippine population, accounting for only 1.4 percent.
The number of listed companies in the PSE is 281, lower than in other bourses in the region. Singapore has 668 listed firms; Vietnam, 756; Thailand, 781; Indonesia, 785; and Malaysia, 952.
The PSE eyes other programs to boost liquidity and local participation in the stock market, including the easing of listing requirements, conducting stock market education programs and introducing new products and services.