PSE expects changes in rules to bring IPO boom

THE Philippine Stock Exchange (PSE) is expecting more companies to raise capital through an initial public offering (IPO) after it amended listing rules and added a temporary relief clause when considering applicants due to the pandemic.

PSE President and CEO Ramon S. Monzon said the Philippine market is running behind as the country has a lower number of companies listing on the stock exchange.

“To address this issue, we relaxed certain requirements for listing in both the Main and SME boards and we introduced a measure that will gauge a company’s suitability for listing despite the challenges it is facing due to the pandemic,” Mr. Monzon said in a statement on Tuesday.

Mr. Monzon went on to thank the Securities and Exchange Commission for acknowledging recommendations to amend the market’s listing rules.

“With this, we hope to attract more companies to dip their foot in the water and consider the stock market as their preferred avenue for capital raising,” Mr. Monzon added.

This month, the PSE will be holding a two-part round table discussion called “The Road to IPO” to discuss the amendments.

“On April 7, top PSE executives and its listings team will take the lead in the information session to discuss the amended listing rules together with officers of investment houses, sponsors for listing applicants in the Small, Medium, Emerging (SME) board, and other key members of IPO deal teams,” the exchange said.

Guidelines for companies that would opt to list through a sponsor are now included in the amended rules for listing.

“This listing format will be beneficial to SMEs and start up companies that have very good profitability and expansion potential but could not tap the stock market for funding because they do not qualify to list based on the set criteria,” Mr. Monzon said.

Sponsoring companies are required to do their due diligence to determine the suitability of the applicant for listing “after assessment of its financial condition, business viability, future prospects and management track record among others” before giving endorsing them to the PSE.

The second part of the round table discussion is set for April 27, where officials of listed companies will discuss their successful IPO stories for the benefit of interested listing applicants.

The PSE president noted that “going public is a once in a lifetime event for many companies.”

“It is important for business owners to know firsthand what it takes to go public from those who have been through the IPO route,” Mr. Monzon explained.

Companies interested in joining the discussions are called on to contact the PSE’s Marketing Services Department via — Keren Concepcion G. Valmonte