The Philippine Stock Exchange Inc. (PSE) said it is more confident now to buy the PDS Holdings Inc., which owns the trading platform for the fixed-income instruments.
PSE President Hans B. Sicat told reporters the operator of the country’s equities market may have a formal signing ceremonies in few weeks on the new term sheet with the PDS that details the new deal.
“There’s just one or two technical issues to be threshed out,” Sicat said, adding that the PSE is more confident now than before that the regulators will agree on its plan that aims to unite the equities and fixed-income markets.
“We’re working with the regulators with constant updates over the last nine months on the final form [of the deal],” Sicat said.
He said the PSE may end up not taking all of the businesses of the PDS, which owns the Philippine Dealing and Exchange Corp., such as its government securities business.
There will be another formal round of tender offer with the smaller stakeholders of the PDS, but there’s already previous agreement with the Bankers Association of the Philippines (BAP) to buy its shares.
BAP owns part of PDS
Aside from the Securities and Exchange Commission (SEC), the PSE will now also have to hurdle the Philippine Competition Commission on the deal.
For most of 2014 and 2015, the PSE was working on the P2.25-billion acquisition for a majority ownership of PDS.
Things headed south, however, when the PSE has asked the SEC for approval, hoping to secure the regulator’s nod in November 2015.
Questions of the SEC mainly surround on which system will the merged platform will use since the PSE and Philippine Dealing Exchange are both using different schemes that ranged from trading platform model to delivery-versus-payment schemes, settlement and clearing systems and also which type of depository to use.
The SEC early last year thumbed down the proposed merger, prompting the PSE to go back to the drawing board and chart a new scheme on buying out the PDS, or the Philippine Dealing System.
The PSE reported a slim 3-percent increase in its net income for last year to P701.54 million, from the previous P682.81 million in 2015.
Listing-related income, which made up about half of operating revenues, rose by 15 percent, despite a lower number of initial public offerings, most of which transpired during the last half of 2016, or after the national elections.
Trading-related income dipped by 2 percent as total value turnover slipped by 10 percent.
Sicat said he is confident that the PSE can hit the P200 billion in primary listing value this year, up from last year’s P177 billion, hoping that firms that bagged a public-private partnership project will raise capital from the PSE to either fund the construction or refinance the debts they used.