PSE 2011 income dips 2.7% on new products, trading engine

MANILA, Philippines – Despite improved market activity in 2011, the net income of Philippine Stock Exchange Inc. dipped slightly due to higher costs for new product development and expenses related to its new trading engine.

In a disclosure on Thursday, March 15, the local bourse said its net income slid 2.7% to P406.19 million in 2011 from the previous year’s P417.50 million.

Higher trading activity and record capital raising levels pushed operating revenues by 9.5% to P900.76 million from P822.45 million.

“We believe that the fruits of the investments we have been undertaking in the past years are now showing. We are highly encouraged by the increase in trading activity this year and we hope we could leverage on this momentum in our plans to introduce more products and services in the market,” said PSE president and CEO Hans Sicat.

Below are highlights of PSE’s 2011 financial performance:

• Trading-related fees rose by 15.2% to P202.86 million from P176.03 million
• Service fees generated by wholly owned nit Securities Clearing Corp of the Philippines increased by 17.8% to P254.03 million from P215.60 million due to higher trading volume
• Listing-related income went up by 6.8% to P429.29 million following the initial public offerings of Megawide Construction Corp., Puregold Price Club Inc., Cirtek Holdings Philippines Corp., Calapan Ventures Inc. and Touch Solutions Inc. that raised a total of P9.04 billion from the market. Philex Petroleum Corp. listed by way of introduction.
• Capital raised at the PSE hit a record P107.50 billion, 26.6% higher than the amount raised in the previous year and breaches by 19.3% the previous record in 2007. Capital raising activities includes IPOs, follow-on offerings, stock rights and private placements.
• Total costs of services and general and administrative expenses climbed by 8.2% to P440.59 million largely due to costs incurred related to the development of new products and higher depreciation costs attributable mainly to the newly installed trading engine PSEtrade. Repairs and maintenances, which include related costs on the new trading engine, also went up.
• Other income fell in the absence of one-time gains on available for sale investments registered in 2010 amounting to P36.95 million although this was tempered by gains from the investment management accounting amounting to P12.34 million.
• Interest income also dropped due to lower interest yields

– Rappler.com