The Market Monitor Minding the Nation's Business
By Riza Lozada
A surge in initial public offerings (IPOs) last year countered weak trading at the bourse to boost the Philippine Stock Exchange Inc.(PSE) net income by 3 percent to P701.54 million last year from P682.81 a year ago.
Operating revenues grew 44.2 percent, consisting mainly of listing-related income last year.
The IPOs and additional and follow-on offerings in 2016 delivered positive results for PSE’s operating revenues at P1.26 billion, rising by 15.6 percent compared to P1.21 billion in 2015.
Listing-related income comprised of 39 additional or follow-on listings of companies.
Trading-related income posted a 2.2 percent drop with total turnover value at P1.93 trillion which was lower by 10.3 percent year-on-year.
Service fees from the Securities Clearing Corporation of the Philippines grew by 10 percent, revenues from data feed was up by 12.5 percent due to the increase in the number of market data subscribers and income from subscription.
PSE President Hans Sicat said healthy IPO and secondary listings this year will support the growth of bourse-related revenues.
Added to this positive outlook is the inclusion of the Dollar Denominated Securities (DDS) and the Public Private Partnership (PPP) rules to diversify product offerings.
“Our revenues were affected by the volatile markets as it kept our trading-related income muted. But the decline in this revenue segment was more than offset by the multiple offerings we had, which picked up in the second half of 2016. This year, we believe we would have a healthy IPO and secondary offerings in the pipeline which could support the growth of listing-related revenues,” Sicat said.
“With the approval of the Dollar Denominated Securities and PPP Listing Rules, we have effectively diversified our product line-up for various types of offerings to take place in our market. We are hoping that trading activity will pick up in the coming months,” Sicat concluded.
The PSE added in its latest index review that Puregold Price Club, Inc. will become a PSE index (PSEi) member for the first time since its listing in 2011, while Emperador Inc. will be removed from the list.
These are among the changes that will be reflected on March 13, 2017, when the results of the index review covering trading activity from January to December 2016 takes effect.
The PSE reviews the index composition twice a year to determine which eligible companies should form part of the main and sectoral indices.
The PSEi review takes into account the company’s public float which should be at least 12 percent, its inclusion in the top 25 percent of securities based on the median daily value per month for at least nine out of the 12 months, and its rank in terms of market capitalization.
Several changes will also be seen in the composition of sectoral indices. No new company will be added in the Financials index but AG Finance, Inc. will be removed from the list.
Five companies will be dropped from the Industrial index namely Concepcion Industrial Corporation, Del Monte Pacific Limited, Phoenix Semiconductor Philippines, Swift Foods, Inc., and Splash Corporation, while two companies, Holcim Philippines, Inc. and Vitarich Corporation, will be included.
For the Holding Firms index, Filinvest Development Corporation will replace Unioil Resources & Holdings Company, Inc.
Two companies will also join the Property index namely, Araneta Properties, Inc. and Primex Corporation, whereas Suntrust Home Developers, Inc. will be removed. Meantime, Apollo Global Capital, Inc. will no longer be part of the Services index. Changes in the Mining and Oil index include the addition of Apex Mining Company, Inc. and the exclusion of The Philodrill Corporation and Trans-Asia Petroleum Corporation.
To be included in the sector indices, the common stocks of the company must rank among the top 50 percent in terms of median daily trade per month in eight out of the 12-month review period.
“The regular index review is an important exercise as this determines the eligible stocks that should comprise the indices based on the set criteria. We know that some investors stock pick based on the index members and so we want the appropriate securities to represent these indices,” said Sicat.