Philippine Stock Exchange (history, profile, securities being traded, Top 20 listed companies,

trading systems & procedures etc

Philippine stock Exchange

The Philippine Stock Exchange, Inc. or in Filipino: Pamilihang Sapi ng Pilipinas; PSE: PSE is
the national stock exchange of the Philippines. The exchange was created in 1992 from the
merger of the Manila Stock Exchange and the Makati Stock Exchange. Including previous
forms, the exchange has been in operation since 1927.
The main index for PSE is the PSE Composite Index (PSEi) composed of thirty (30) listed
companies. The selection of companies in the PSEi is based on a specific set of criteria. There
are also six additional sector-based indices. The PSE is overseen by a 15-member Board of
Directors, which is chaired by José T. Pardo.
The Philippine Stock Exchange, Inc. (PSE or Exchange) is a private non-profit
and non-stock organization created to provide and maintain a fair, efficient,
transparent and orderly market for the purchase and sale of securities such as
stocks, warrants, bonds, options and others.
 
ROLE:
The PSE bring together companies which aim to raise capital through the issue
of new securities. Through the listing of their share in the stock exchange,
companies can have easier access to funds. Raising new capital through an
additional public offering is easier and less expensive when the company is already
listed in the Exchange. Therefore, the PSE plays a vital role in the financing of
productive enterprises that use the funds for growth and expansion of new
jobs. It is therefore essential to the growth of the Philippine economy.
 
Furthermore, the PSE facilitates the selling and buying of the issued stocks and
warrants. It provides a suitable market for the trading of securities to
individuals and organizations seeking to invest their saving or excess funds
through the purchase of securities.
 
Apart from these functions, the PSE has committed itself to (a) protecting the
interest of the investing public; and (b) developing and maintaining an efficient,
fair, orderly and transparent market.
 
Efficient      This means that orders are executed and transactions are settled in
the fastest possible way. Some reforms have been instituted or are being carried
out by the PSE to make the market more efficient, such as:
         installation of fully automated trading system;
        installation of computer trading terminals in cities outside Metro
Manila to encourage the entry of provincial investors; and
creation of a central cleaning and depository system to mobilized
stock certificates and allow transfer of shares and funds by book
entry.
 
Fair      This means that the PSE assures that no investor will have an undue
advantage over another ,market player in trading by manipulating prices and
engaging into insider trading. Insider trading is the act of buying or selling a
particular stock based on certain privileged information which is not available to
the public. As such it is considered as illegal and prohibited by the PSE.
 
Market Transparency      Transparency proceeds from the assumption that the
investor can only make informed and intelligent information about the particular
sock he wants to buy. The PSE requires listed companies to disclose timely,
complete and accurate material information to the Exchange and the public on a
regular basis. Such information would include stock price information, corporate
conditions and developments which tend to affect stock prices like dividend,
mergers and joint ventures, and the like.

History
February 3, 1936-  the Securities and Exchange Commission announced that it had
"relinquished control of the Manila Stock Exchange.”
December 23, 1992- The Philippine Stock Exchange was formed from the merger of the Manila
Stock Exchange (MSE) and the Makati Stock Exchange (MkSE)

established on May 15,

Established on August 12,
1963, based in the Makati
1927, based on Muelle de la
Central Business District,
Industria, Binondo,  Manila
within Ayala Tower One

 Both exchanges traded the same stocks of the same companies.

June 1998-the Securities and Exchange Commission (SEC) granted the PSE a "Self-Regulatory

Organization" (SRO) status, which meant that the bourse can implement its own rules and establish
penalties on erring trading participants (TPs) and listed companies.
 2001- the PSE was transformed from a non-profit, non-stock, member-governed
organization into a shareholder-based, revenue-earning corporation headed by a
president and a board of directors.

December 15, 2003- listed its own shares on the exchange (traded under the ticker
symbol PSE).

How did the PSE begin?

 
      The Philippine Stock Exchange began 70 years ago, on August 8, 1927. Five
Manila based businessmen, namely W. Eric Little, Gordon W. Mackay, John J.
Russell, Frank W. Wakefield and W.P.G. Elliot felt that increasing trading activity
would stimulate the business atmosphere. They got together, put their plan into
action and founded the Manila Stock Exchange, the first Stock Exchange in the
Philippines and one of the oldest in the Far East. It was originally located in
downtown Manila, transferred in1970 to its own three-story building in Binondo,
and then moved to Pasig in 1992.
 
      On May 27, 1963, the Makati Stock Exchange was organized by five other
businessmen. These were Hermenegildo B. Reyes, Bernard Gaberman, Eduardo
Ortigas, Aristeo Lat and Miguel Campos. It started it operations on November 16,
1965 and was located in Makati, then emerging center for finance.
 
      So, for about thirty years the Philippines had toe stock exchanges, the Manila
Stock Exchange (MSE) and the Makita Stock Exchange (MKSE). Although the
two exchanges remained as separate entities, they basically were trading the same
listed issues.
 
      The existence of two stock exchanges in one country caused confusion among
(prospective) investors because the two bourses had different policies, different
members and, last but not the least, different stock prices for the same listed
stocks.
 
      The idea to unite the two exchanges and have it managed by a professional group
emerged and was attained when the Philippine Stock Exchange, Inc. was
incorporated on July 14, 1992. To further consolidate logistics and to hasten the
development of a more efficient capital market, the leaders of both bourses agreed
to unify on December 23, 1993 under the PSE.
 
      On March 4, 1994 the Securities and Exchange Commission granted the
Philippine Stock Exchange, Inc. its license to operate as a securities exchange in
the country stating that “a unified Stock Exchange is vital in developing a strong
capital market and a sustainable economic growth.” It simultaneously canceled the
licenses of the MSE and the MKSE.
 
      The Philippine Stock Exchange is currently the only organized exchange in the
Philippines licensed for trading stocks and warrants.

PROFILE

Dollar-Denominated Securities (DDS) are securities listed,

traded, and settled in US dollar (USD). The introduction of
DDS aims to provide issuers and investors more
instruments to meet their specific requirements.

It can provide issuers with dollar-denominated

requirements an opportunity to raise capital at the
Exchange without incurring foreign exchange risks

Philippine stocks in US
dollars?
ByBusinessMirror Editorial
December 8, 2016

Back in the days before the consolidation of

the Makati Stock Exchange and the Manila
Stock Exchange, traders were transacting
profitable trades by using price arbitrage
between the two exchanges. As issues were
traded on both markets, often there were times that the price for the same
stock was different on both exchanges.

Most of the time, the price differential was minimal. However, there were
times that a person could buy on one market and simultaneously sell on the
other for a profit. That is a form of arbitrage trading.

The Philippine Stock Exchange (PSE) has announced that it has finalized the
rules to allow listing and trading of issues in both Philippine peso and the
US dollar.

This is not a new idea. In 2002 the idea was finalized and apparently started
trading in 2003. The trading and settlement with dollar denominations was
intended to be strictly for offshore issues listed on foreign exchanges, such as
in the US, Canada, Hong Kong and the UK. The volume and results of that
program are unknown, as all information on the success or failure has
disappeared or was never widely available

Having stock-market issues trade in two different currencies is fairly

widespread, particularly in Asia including the Toronto Stock Exchange. In its
appraisal of dual-currency trading, the Toronto exchange acknowledged and,
to a certain extent, encouraged investors to arbitrage dual listed, as this would
bring trading transactions to the Canadian exchange.

The purpose is threefold; to make it easier—and cheaper—for foreigners to

invest in the Philippine market; to virtually eliminate foreign-currency risk
for foreign investors; and to allow locally listed companies easier access to
foreign investors
Back in the days before the consolidation of the Makati Stock Exchange and
the Manila Stock Exchange, traders were transacting profitable trades by
using price arbitrage between the two exchanges. As issues were traded on
both markets, often there were times that the price for the same stock was
different on both exchanges.

Most of the time, the price differential was minimal. However, there were
times that a person could buy on one market and simultaneously sell on the
other for a profit. That is a form of arbitrage trading.

The Philippine Stock Exchange (PSE) has announced that it has finalized the
rules to allow listing and trading of issues in both Philippine peso and the US
dollar.

This is not a new idea. In 2002 the idea was finalized and apparently started
trading in 2003. The trading and settlement with dollar denominations was
intended to be strictly for offshore issues listed on foreign exchanges, such as
in the US, Canada, Hong Kong and the UK. The volume and results of that
program are unknown, as all information on the success or failure has
disappeared or was never widely available.

Having stock-market issues trade in two different currencies is fairly

widespread, particularly in Asia including the Toronto Stock Exchange. In its
appraisal of dual-currency trading, the Toronto exchange acknowledged and,
to a certain extent, encouraged investors to arbitrage dual listed, as this would
bring trading transactions to the Canadian exchange.

The purpose is threefold; to make it easier—and cheaper—for foreigners to

invest in the Philippine market; to virtually eliminate foreign-currency risk
for foreign investors; and to allow locally listed companies easier access to
foreign investors.
But before you get too excited, understand that DDS will only apply to local
companies when they issue a new set of securities either common or
preferred shares. For example, food conglomerate Del Monte Pacific Ltd.
intends to issue up to $360 million in US-dollar denominated preferred shares
early next year.

The trading, pricing and settlement details of the DDS are that the dollar
price will be determined by the previous day’s closing price on the Philippine
Dealing System. Any currency rate changes today will not take effect
until tomorrow.

 How is the PSE managed?

      One of the non-broker members heads the Exchange, appointed by the Board as
the President and Chief Executive Officer (CEO). The President, along with the
professional management of the PSE, executes the policy determinations of the
Board and ensures that the Exchange is operating efficiently. It carries out for the
members, listed companies and exchange system to ensure that stock market
operation in the Philippines is kept within the standards of fairness, transparency,
professionalism, trust and integrity. Additionally, it sets the rules and regulations
of the Exchange, monitors its implementation and ensures that the investing public
is given protection in the transaction of their investments. The Exchange also
ensures that all legal requirements under the Corporation Code and the Revised
Securities Act are met.
 How is the PSE organized?
 
The PSE”S organizational structure holds five (5) groups, namely: Listings &
Disclosure Group, Compliance & Surveillance Group, Operations/Automated
Trading Group, Finance and Investment Group and Business Development &
Information Group along with the Office of the General Counsel, Membership
Department and Human Resources Management Department, which reports
directly to the Office of the President.
 
The functional responsibilities of each department are as follows:
 
Listings and Disclosure Group               This group is composed of the following
departments: Listing Processing, Legal Advisory and Corporate Disclosure. It
processes and evaluates listing applications, conducts legal due diligence, and
monitors compliance to continuing listing requirements including disclosure of
listed companies. It also coordinates IPO (initial public offering) distribution.
 
Compliance and Surveillance Group      This group acts as the police of the
Exchange. It is composed of the Compliance Audit Department, Special
Investigation Department, Market Surveillance Department and Legal Section. Te
group conducts legal audit and review aside from auditing of member-brokers
books and operations. It also monitors the member’s compliance to set rules and
regulations and enforces appropriate sanctions to violators or erring member-
brokers. It takes responsibility in the operation of the surveillance activity, to
ascertain that there are no illegal postings and dealings made in any of the issues
listed in the Exchange.
Operations/Automated Trading Group               Placed under this group are the
Computer Operations Unit, Systems Development Unit and Systems Integration
and technical Support Unit along with the Trading & Settlement Department,
Administration Department and PSE Plaza Operations Department to function as
one group. It is considered as one of the most critical responsibility areas in the
organization since it handles the operation of the automated trading and clearing
and settlement activities for stock operations.
 
The Automated Trading Group examines and controls the monitoring, logging and
analysis of computer system resource utilization; the maintenance of network
connections of all workstations at the trading floor and remote offices; managing
of database of off-floor installed sites; and the implementation and integration of
the different components of the trading and office systems.
 
On the other hand, the Trading and Settlement Department monitors compliance of
member-brokers to the clearing and settlement requirements of the settlement
banks and central depository. It coordinates with these agencies and the custodian
banks, both local and foreign, any trading discrepancies, irregularities or
settlement concerns of the member-brokers and investing public.
 
The Administration Department and the PSE Plaza Operations Department handles
the building maintenance, security and administration as well as the procurement
management and utilization of supplies and equipment including the daily
administrative requirements of the Exchange. It is also responsible for the daily
dissemination of all the listed companies’ corporate announcements along with the
foreign quotation report.
 
Finance and Investment Group               The group is responsible for the
management of the company’s financial resources. It is composed of the
Accounting Department, Treasury Department, Payroll and Budget Section and
Investments Monitoring Section which handles the maintenance of book of
accounts, preparation of financial statements and budget, management and
placement of PSE funds, monitoring of accounts receivables and billing of
accounts.
 
Business Development and Information Group      This group is comprised of the
following: Product Development Department, Market Development Department,
Research and Public Information Department, Corporate communications
Department, PSE Training Institute and PSE Rule Book/Task Force Quality Unit.
 
The Product Development Department is in charge of the expansion, development
and packaging of domestic and foreign financial products, equity-related
securities, debt-related securities and other forms of securities and derivatives. It
coordinates with private businesses, government agencies and associations in the
overall development and packaging of the securities, derivatives and trading
facilities.
 
The Market Development Department handles the expansion, development and
monitoring of the investor base for both domestic and foreign market on an
individual and institutional level. It looks at the PSE trading operation’s presence
and positioning in the domestic, regional, and international markets including the
expansion and development of market intermediation services and facilities
covering secondary, over-the-counter (OTC) and third markets.
 
The research and Public Information Department is composed of the Research
Services Sections, Information and Publications Section and the Public
Information and Assistance Center (PIAC). It conceptualizes, processes,
consolidates and handles multi-media dissemination of statistical and analytical
information and studies related to the business requirements of members. It
conducts research and provides information support to the expansion and
development of the Exchange trading operations and its markets. It also maintains,
develops and disseminates information through manual or electronic libraries and
documentation. The department produces regular publications – Weekly Report,
Monthly Reports, and Fact Book – that provide market users with a review of the
market’s performance along with historical and current data on stock trading
activities and listed companies. The Department also acts as the liaison of the
Exchange through the sharing of data and information with foreign individuals,
organizations and institutions.
 
Under the Research and Public Information Department is PIAC which implement
the Exchange’s continual public assistance program by covering information
promotion and facilitation along with complaints mediation in the physical center
at the principal offices of the PSE. It also manages the operation of the PSE
Souvenir Shop.
 
The Corporate Communications Department manages all forms of media and
public relation through press releases, information and educational campaigns. It is
in charge of managing and developing business promotional and marketing
exposure requirements of the PSE including the production and dissemination of
corporate internal bulletin and other forms of information materials.
 
The PSE Training Institute is responsible for the development of
programs/curricula along with providing lectures, trainings and seminars about
securities market participants. Aside from in-house seminars, it conducts road
shows to investors in the provinces. The Institute also provides logistics support to
all training-related activities of the departments in the PSE. In the future, the
Institute plans to conduct activities such as the Certified Securities Representative
(CSR) seminars and the technical and fundamental analysis seminars in the
coordination with other intuitions.
 
The PSE Rile Book/Task Force Quality is responsible for the codification and the
manualization of the PSE’s rules, guidelines, procedures and other legislative
materials coming from government agencies, into a consolidated and
comprehensive Manual of Rules of the Exchange.
 
The PSE Rule Book consists of five (5) volumes which are: (1) Corporate Rules,
(2) Membership Rules, (3) Listing and Disclosure Rules, (4) Trading and
Settlement Rules, and (5) Compliance and Surveillance Rules.
 
Membership Department      This department manages, implements and
coordinates members’ requirements, planned activities and projects with the end in
view of assisting PSE management in the expansion, consolidation and
development of its membership. It also processes membership applications and
various corporate changes of member-brokers for approval by the Membership
Committee. It is in charge of circular preparations concerning membership, and the
monitoring of financial statements of brokers and SEC licenses of its stock traders.
In coordination with the Membership Committee, it facilitates memberships
arbitration. Further, the Membership Department organizes and prepares social
activities for all members.
 
Human Resources Management Department      This department, under the
Office of the President, handles employee career management, administration of
employee compensation and benefits, management of corporate culture and
organization development, implementation of the company’s performance
management system and formulation and enforcement of company policies. To
ensure continuing organization and employee development, this department
integrates the organizational structure/processes and workforce issues into the
business equation and evaluates group processes and dynamics to tailor-fit results
with a corporate staff training and management development program.
 
Office of the General Counsel          The Office of the General Counsel renders
corporate legal services and serves as the primary legal advisor to the Board of
Governors, the President, the Chief Operating Officer, the various departments,
officers and employees of the Exchange. It also coordinates with the external legal
consultants on matters referred by the exchange; represents the Exchange before
judicial and administrative/quasi-judicial bodies; and, attend legislative and
administrative hearings or meeting as well as draft position papers and/or
comments to pending legislation and administrative issuances.
 

1. Aboitiz Equity Ventures, Inc. – sector: Holding Firms

2. Aboitiz Power Corp. – sector: Energy & Utilities
3. Alliance Global Group, Inc. – sector: Holding Firms
4. Ayala Corporation – sector: Holding Firms
5. Ayala Land, Inc. – sector: Real Estate
6. Bank of The Philippine Islands – sector: Finance
7. BDO Unibank, Inc. – sector: Finance
8. DMCI Holdings, Inc. – sector: Holding Firms
9. First Gen Corporation – sector: Energy & Utilities
10. Globe Telecom, Inc. – sector: Telecommunications
11. GT Capital Holdings, Inc. – sector: Holding Firms
12. International Container Terminal Services, Inc. – sector:
Transportation & Logistics
13. JG Summit Holdings, Inc. – sector: Holding Firms
14. Jollibee Foods Corporation – sector: Food & Beverages
15. LT Group, Inc. – sector: Holding Firms
16. Manila Electric Company – sector: Energy & Utilities
17. Megaworld Corporation – sector: Real Estate
18. Metro Pacific Investments Corporation – sector: Holding Firms
19. Metropolitan Bank & Trust Company – sector: Finance
20. Petron Corporation – sector: Energy & Utilities