Finance Dept. wants minimum public float higher than 10%

The Department of Finance (DOF) is looking at starting talks with officials of the Philippine Stock Exchange (PSE) on possibilities of hiking minimum public float of listed companies in a bid to deepen Philippine capital markets, a Cabinet official said. “The deeper the float, the better for price discovery, especially in our markets, so at this point, one of the next steps is to talk about adjusting it upwards to more than 10 percent,” Finance Secretary Cesar V. Purisima told a press roundtable. Purisima said talks will likely start after the PSE’s deadline for compliance on its minimum 10 percent public float lapses on June 30. “As to what the number is, we don’t have anything in mind. Although we'd like to sit down with PSE at some point after they've completed the compliance on the 10 [percent],” he said. The Finance chief noted that he will “leave it up to the PSE to choose.” Purisima, however, said any increase in public floats should be consulted with “market participants and different sectors within the market.” Early last year, the PSE required publicly-listed firms to have a minimum of 10 percent of their issued and outstanding shares, exclusive of any treasury shares, held by the public. This was aimed to “provide a fair and efficient facility for price discovery and to ensure that sufficient liquidity exists in the stock market,” the PSE board has said. In the first trading day of the year, January 2, the PSE suspended trading of shares listed companies that remained non-compliant with the minimum public ownership rule. Suspension will be lifted once listed companies comply with the public float rule. But a listed company that remains non-compliant with the directive will be automatically delisted after June 30.   Currently, suspended firms include PNOC Exploration Corporation, Southeast Asia Cement Holdings Inc., and PAL Holdings Inc. Other companies opted to delist from the domestic equities mart. — KBK, GMA News