The Philippine Stock Exchange (PSE) said it wants to increase the number of companies listed in its Small, Medium and Emerging (SME) Board next year.
“As the economy experiences prolonged high- growth levels, it is inevitable that the gains become more inclusive even at the corporate level. The companies that listed in the SME Board this year support this observation, as we see smaller-sized and emerging companies starting to seek capital market-based funding to expand their operations,” PSE President and CEO Hans Sicat said in a statement.
This year two companies were added to the SME Board.
DoubleDragon Properties Corp. listed on April 7 and raised P1.16 billion from its initial public offering, while Xurpas Inc. listed on December 2 and raised P1.37 billion.
In 2013 the PSE simplified its listing-board structure to just two, from the three-board system, to accommodate more small, medium and emerging companies into the stock market, while enhancing the governance requirements to boost investor protection.
To be listed in the SME Board, the PSE requires a company to have an authorized capital stock of P100 million or more, of which a maximum of 25 percent must be subscribed and fully paid.
The company should also have a cumulative earnings before interest, depreciation and
amortization (Ebitda) of at least P15 million, excluding nonrecurring and extraordinary income and/or loss for the last three fiscal years immediately preceding the application for listing.
The company must have a positive Ebitda during at least two of the three full-fiscal years immediately preceding the application for
listing, including the fiscal year immediately preceding the application.
On the other hand, those listed in the main board must have an authorized capital of at least P500 million, at least three years of operating history and Ebitda of at least P50 million for the last three years before their listing.
“We hope that the market’s overwhelming response to the share sale of DoubleDragon and Xurpas will encourage more SMEs to consider listing at the Exchange,” Sicat said.
To support this initiative, the PSE said it has conducted seminars and discussions with the Development Bank of the Philippines, start-up technology firms, and small and medium enterprise owners.
Sicat earlier said the PSE is maintaining its P200-billion target for next year, despite failing to hit the level this year and the potential headwinds from developed nations.
Sicat added that the P200-billion target funding from the equities market will still be a good target for next year, as a result of relatively low interest rates and high consumption level.
“We are also cautiously optimistic that, despite the potential headwinds from around the globe, the Philippines will be able to remain flexible. And despite any headwinds, we continue to have strong [economic] fundamental background,” Sicat said.
Sicat already admitted that the P200-billion funds raised from the equities market will not be met by the end of the year, partly as a result of the deals that did not materialize due to various issues, including the long processing and approval time from the side of the Securities and Exchange Commission.