AIA Philippines Life and General Insurance Co. Inc. has entered into a share sale agreement with the Philippine Stock Exchange Inc. (PSE), furthering the bourse’s goal of consolidating the nation’s capital markets. The insurer is set to sell 250,000 common shares in Philippine Dealing System Holdings Corp. (PDS), equivalent to a 4 percent stake in the bond market trading operator, in a transaction valued at approximately P600 per share. This comes as part of the PSE’s broader plan to acquire PDS and integrate it into its operations.
The deal, valued at P2.53 billion, is a strategic move to streamline the Philippine capital market, aligning it with global market standards that typically feature a single exchange structure for both equities and fixed income securities. The PSE emphasized that the acquisition would result in “vertical integration” by consolidating trading, clearing, settlement, and depository functions under one group.
AIA Philippines joins a list of other key shareholders, including the Bankers Association of the Philippines, Singapore Exchange Ltd., Whistler Technologies Services Inc., and San Miguel Corp., all of whom signed similar agreements to sell their shares in PDS. Collectively, these transactions will see the PSE take control of approximately 63.1 percent of PDS, with the remaining shares distributed among smaller stakeholders.
This acquisition is set to enhance the PSE’s ability to facilitate smoother operations across both the equity and fixed income markets, creating a more integrated financial ecosystem. The consolidation of the PDS’s operations under the PSE umbrella is expected to foster increased liquidity, improve market efficiency, and attract more investments into the Philippine market.
As the operator of the Philippine Dealing and Exchange Corp. (PDEX) and the Philippine Depository and Trust Corp. (PDTC), PDS plays a crucial role in the nation’s financial infrastructure, managing the country’s bond market and securities depository services. By acquiring full control over these operations, the PSE aims to reduce fragmentation and ensure more seamless transactions across various asset classes.
In summary, this acquisition marks a significant milestone in the PSE’s long-term strategy to modernize and strengthen the Philippine capital markets, positioning the country more favorably in the eyes of global investors.
