The Bankers Association of the Philippines (BAP) is willing to sell its stake in the Philippine Dealing System Corp. that owns the fixed-income trading market provided the right conditions are present.
This was stressed by Jose Teodoro Limcaoco, BAP president as well as Bank of the Philippine Islands CEO, saying the organization’s shareholders also want to see the governance mechanism of the PDS when it is already being operated by the PSE.
According to Limcaoco, while the PSE has offered to buy the PDS Group that operates the Philippine Dealing and Exchange Corp. (PDEX), they have not indicated a price.
“They have said they want to buy. There’s no price. We’ve engaged an adviser on what the value might be. That’s where we are,” Limcaoco said.
“We have to understand the governance at PDEX. PDEX is the bond exchange. The biggest customers there are the banks. We want to understand how that would operate,” Limcauco said.
“We’re a shareholder of PDS, which in effect has shareholdings in PDEX. So we understand how PDEX is governed. If we were to sell PDS, we wouldn’t understand how PDEX is governed. So we’re trying to understand how they are supposed to govern PDEX,” Limcaoco said.
PSE president and CEO Ramon S. Monzon said the PSE is renewing the BAP’s special power of attorneyto restart the negotiations anew.
“We’re willing to sell at the right conditions. They’ve given us a letter saying that they are interested. There’s no price,” Limcaoco said.
Incorporated in 2003, PDEX operates the secondary market for the trading of fixed-income securities issued by corporations and state entities.
PDEX also calculates the Philippine Dealing System Treasury Reference Rates, which form the basis for valuing and marking-to-market interest rate-sensitive instruments.
Monzon had said the PSE hopes to close the transaction this year after the PSE obtained relief from the Securities and Exchange Commission (SEC) on ownership limits in an exchange like the PDS as outlined in the Securities Regulation Code.
The PSE owns 20.98 percent of PDS but RA8799 caps ownership in the PDS at 20 percent by an individual or an industry.
The other PDS shareholders include the Singapore Stock Exchange, Whistler Technologies Services Inc., Tata Consulting Services Asia, San Miguel Corp., FINEX and the Social Security System.
