Listing By way of Introduction, suspended – PSE

The Philippine Stock Exchange (PSE) has suspended its Rules on Listing by Way of Introduction under its Revised Listing Rules and will stop accepting applications under these rules which has been considered a loophole in its stringent listing requirements.

The recently revised PSE rules allows firms to list their shares at the bourse without first undertaking an initial public offering as long as they are required to go public by law and of they commit to do an IPO within 12 months.

In a memoradum dated February 18 but posted on February 19, PSE general counsel and issuer regulation head Roel Refran said the bourse’s board decided on the temporary suspension of the rules in their meeting last February 17.

The suspension came just after the listing by way of introduction of IP E-Game Venture Inc. which had more than doubled its share price to P115 per share Saturday from its suggested opening price of P50 per share upon listing last February 17.

Except for AgriNurture Inc., other firms that had recently listed by way of introduction also enjoyed rapid run-ups in share prices.

Century Peak Metals Corporation traded at P3.40 Saturday from its listing price of P1.00 while Integrated Micro-Electronics Inc. closed at P16.50 after surging to P68 apiece from its listing price of P6.24.

“However, the Exchange shall continue to process and apply the rules to applications for listing by way of introduction filed before the suspension. The suspension of the rules shall take effect immediately until further notice,” Refran said.

PSE chief operating officer Val Suarez said “the PSE is reviewing the requirements for listing by way of introduction. We hope to refine the listing rules to meet the demands of the investing public.”

A stockbroker noted that “too many companies are taking advantage of that loophole. It’s not nice to see closely held companies list on the PSE without going public and then pump up their price, creating huge market capitalization figures based on tiny volumes.”

Eagle Securities president and former PSE board director Joseph Roxas said the PSE really has to revise its rules on listing by way of introduction because the current rules allow the listing of what he called “cornered stocks” or companies that are owned by only a handful of shareholders.

By JAMES A. LOYOLA from manila bulletin

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