PSE hopes to acquire 95% of PH Dealing System Holdings

MANILA, Philippines – The Philippine Stock Exchange (PSE) said it hopes to acquire as much as a 95-percent stake in the Philippine Dealing System Holdings Corporation (PDSHC).

PDSHC is the operator of the country’s markets for fixed-income securities and foreign exchange. The buyout by PSE of PDSHC shareholders will pave the way for the merger of the equities and fixed-income exchanges.

The exchange is waiting to secure exemptive relief from the Securities and Exchange Commission (SEC) before proceeding with the acquisition of majority stake in PDSHC, PSE President Hans Sicat said in an interview on the sidelines of the ASEAN Capital Markets and Investment Summit Tuesday, October 6.

PSE earlier sought an exemptive relief from the SEC because under the Securities Regulation Code, no single industry or business group should own more than 20% of an exchange.

Sicat added he hopes to complete the deal within this month.

To finance the acquisition, the PSE earlier obtained P1.15 billion ($24.77 milion) 5-year loan from several banks. (READ: PSE to raise P1.15B for PH dealing system funding)

“We’re confident we can make the minimum 67% super majority. But we think we can get probably 94% to 95% stake,” Sicat added.

In July, the PSE reached agreement with the Bankers Association of the Philippines (BAP) to acquire the latter’s 1.81 million shares, or 28.91%, of PDSHC. BAP represents some of the biggest banks in the country.

Under the agreement, PSE would pay the BAP, which represents some of the biggest banks in the country, P650.55 million ($14.01 million), valuing 100% of PDSHC at P2.25 billion ($48.45 million).

Other PDSHC that have expressed intention to sell their shares to the PSE include the Bankers Association of the Philippines, San Miguel Corporation, Golden Astra, Tata Consultancy Serves Asia, Computershare Technology Services, The Philippine America Life and General Insurance Company, Financial Executive Institute of the Philippines, Social Security System,and Investment House Association of the Philippines.

PSE is also in talks with the Singapore Stock Exchange, one of the biggest shareholders of PDSHC, to acquire the latter’s 20% stake in the bond exchange, Sicat said.

PSE Index bounced back to the 7000 mark at 93.56 points or 1.34% to close at 7,055.49 Tuesday.

Asian stock markets were also mostly higher, as agreement on a Pacific-wide free-trade agreement and hopes that major central banks will maintain extra-loose monetary policies fired another rally.

The dollar was also lower against emerging markets currencies as analysts said last week’s disappointing US jobs report all but put a nail in the coffin of a US Federal Reserve (US Fed) interest rate hike this year. (READ: Trade deal, easy monetary policy boost Asian stocks) – Rappler.com