SharePHIL in the News

Beware of the short-swing profits rule!

By Francis Lim (Philippine Daily Inquirer) | 07 March 2018

In broad strokes, the short-swing profits rule provides that any profit realized by insiders of an issuer from the purchase and sale, or any sale and purchase, of any equity security of the issuer within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the issuer (Section 23.2, Securities Regulation Code).

The insiders covered by the rule are officers, directors and beneficial owners or those holding more than ten percent of any class of any equity security of the issuer.

The short-swing profits rule is separate and distinct from the insider trading rule, which is governed by a different provision under section 27 of the Securities Regulation Code (SRC). Read more

Bitcoin too good to be true?

By Francis Lim (Philippine Daily Inquirer) | 18 January 2018

As of this writing, one bitcoin is already equivalent to $10,338. Late last year, it reached an all-time high of $19,783.06. Still, it was a meteoric rise from just $2.00 in December 2011.

The average daily volume of bitcoin is $40 million and its global market value is around $213 billion. In the Philippines, monthly trading volume is now estimated to be about $6 million from only $2 million in the previous year.

Indeed, bitcoin, the world’s largest cryptocurrency, is the newest buzzword in the market. We often hear of people making and losing tons of money on bitcoins within a single day of trading. Bloomberg reported on Tuesday that bitcoin was down 25 percent and its rival cryptocurrencies, ripple and ethereum, sank as much as 40 percent and 26 percent, respectively. Read more

Hidden information, hidden action and the stock market

By Peter L. U (The Manila Times) | 13 February 2018

In 2001, George Akerlof, Michael Spence and Joseph Stiglitz were awarded the Nobel Prize in Economics for their work on asymmetric (or hidden) information and markets. Hidden information exists in a market when one or both parties in a transaction hold more or less information about the exchange than the other party. In his seminal paper, Akerlof used the second-hand (used) car market as an example. The seller of a used car normally has more information about his car (its defects and “warts”) than the prospective buyer because he uses it every day.

In many contexts, the presence of asymmetric information leads to the problem of hidden action or moral hazard. A classic context is a supervisor who can only monitor imperfectly the activities of a subordinate e.g. the latter is out in the field most of the time. The subordinate may be tempted to shirk or not exert full effort since it may be difficult to detect. Economists call this moral hazard, or also a principal-agent problem, since the supervisor (principal) faces a problem of how to get the subordinate (or agent) to act consistent with the principal’s interest.  Read more

Lessons from millennial corporate leaders

By Benito L. Teehankee (BusinessWorld) | 7 December 2017

In 2013, Time magazine called the millennials the “Me-Me-Me” generation and its cover declared that “millennials are lazy, entitled narcissists.” Not surprisingly, the age group helped make “selfie” into Oxford Dictionaries’ Word-of-the-Year that same year.

During a recent forum organized by the Securities and Exchange Commission and the Philippine Stock Exchange, I spoke on the topic of “Millennials and the Future of Corporate Governance.” Reacting to my talk was a panel of millennials who gave me reason to doubt any simplistic characterization of this dominant group in today’s workplace.

I learned three main things by listening to the panel, which was ably moderated by Anna Licaros, country head of regulatory compliance at Hong Kong & Shanghai Banking Corp. First is that investing in understanding millennials will pay off for business organizations. Secondly, the technology skills of millennials positively affect their views on corporate governance and transparency. Thirdly, millennials intuitively and profoundly understand the social obligations of business.  Read more

Millennials and corporate governance

By Benito L. Teehankee (The Manila Times) | 21 November 2017

A lot has been said about millennials, those born in the ‘80s and who came of age during the 21st century. While I don’t think it’s possible to generalize about such a big group of people, it is a fact that they grew up in a world quite different from their parents’; a world of instant access to information and the ability to broadcast (via social media) it through the internet, mobile communications, a more globalized economy, a geo-political landscape where the Cold War between market democracies and communist regimes has been replaced by tensions related to terrorism, and the frightening impact of climate change. As a result, they tend to be generally more informed of global developments, more empowered to find out things for themselves and to have an opinion about such things and to be more concerned about what goes on in the world.

The millennials have been entering the corporate boardrooms during the past decade, slowly but surely. Will more millennial-enriched boards improve corporate conscience for sustainability? My fearless forecast is that because of their greater exposure to global realities, millennials will contribute to better corporate governance in specific ways.  Read more

PH a fourth-world country?

By Francis Lim (Philippine Daily Inquirer) | 19 October 2017

The new president and chief executive of the Philippine Stock Exchange (PSE), Ramon S. Monzon, was the guest speaker in the recent annual general membership meeting of the Shareholders’ Association of the Philippines (SharePHIL).

In the course of discussing his vision for the PSE, Monzon presented data which caught the ears and eyes of members.

According to Monzon, the PSE is “one of the oldest bourses in Asia” but now pales in comparison to much younger exchanges in the Asean region based on data as of the end of August 2017.

The PSE only has 269 listed companies compared to Bursa Malaysia (901), Singapore Exchange (753), Stock Exchange of Thailand (667), Indonesian Stock Exchange (555), Hanoi Stock Exchange (379) and Ho Chi Minh Exchange (340). Read more

PSE wants to operate electricity exchange

By Doris Dumlao-Abadilla (Philippine Daily Inquirer) | 18 October 2017

The Philippine Stock Exchange (PSE) is asking the Department of Energy (DOE) to give it the mandate to operate the country’s spot electricity market, seen as a prospective win-win partnership for the local bourse and the deregulated local energy industry.

For the PSE, this is part of its dream to diversify its portfolio and maximize the use of its platform for other products beyond equities, PSE president Ramon Monzon said in a recent presentation to the Shareholders Association of the Philippines.

“Our long-term vision, our dream is that we will operate other exchanges. The PSE will just be one exchange,” Monzon said. Read more

PSE to launch short-selling, other products in 2018

By Doris Dumlao-Abadilla (Philippine Daily Inquirer) | 18 October 2017

The Philippine Stock Exchange (PSE) aims to introduce short-selling as a hedging mechanism in the stock market by the first quarter of next year.

Short-selling allows investors to sell stocks they do not own yet by borrowing the underlying securities, a practice already allowed under the Securities Regulation Code (SRC).

While a lot of people associate short-selling with speculation, PSE president Ramon Monzon said in a recent forum with the Shareholders Association of the Philippines (SharePHIL) that this was an essential hedging mechanism that could attract foreign investors.

But to be able to launch short-selling, Monzon said the PSE would have to work on securities borrowing and lending.

“The most logical vehicle is PDTC (Philippine Depository and Trust Corp.) because all securities are there,” Monzon said. Read more

Chinese bourse seen buying stake in PSE

By Doris Dumlao-Abadilla  (Philippine Daily Inquirer) | 17 October 2017

The Philippine Stock Exchange (PSE) is in talks with the Shenzhen Stock Exchange (SZSE) to be a cornerstone investor in the former’s P2.5-billion follow-on stock offering program.

In a presentation before the Shareholders Association of the Philippines (SharePHIL) yesterday, PSE president Ramon Monzon mentioned the possibility of forming a tie-up with SZSE to establish a cross-border trading linkage or “Shenzhen Connect.”

Monzon said he was pursuing this tie-up because he was particularly interested in boosting the flow of Chinese investments into the local stock market.

Part of the prospective tie-up is for SZSE to acquire shares in the PSE but this should be no more than 5 percent as mandated by local securities law as the ownership cap for any single investor in a local bourse, Monzon said. Read more

Philippine Stock Exchange in talks with Shenzhen bourse on investment

By Cliff Venzon (Nikkei Asian Review | 16 October 2017

PSE aims to raise capital, expand investor reach, in line with warming relations with China under Duterte

MANILA -- The Philippine Stock Exchange is in talks with its counterpart in Shenzhen in China over a potential investment, as one of Southeast Asia's smallest bourses moves to raise capital and expand its investor base.

Discussions are still "very preliminary," PSE President and CEO Ramon Monzon told reporters on Monday after revealing the talks during his speech at the annual meeting of the Shareholders' Association of the Philippines.

PSE, the Philippines' sole stock trading platform, is inviting the Shenzhen Stock Exchange to participate in the sale of shares to partly fund its merger with the PDS Group, the country's lone fixed-income exchange. Read more

Shenzhen Stock Exchange buying stake in PSE

By Jennifer B. Austria (Manila Standard) | 16 October 2017

The Shenzhen Stock Exchange is in talks for a possible investment in the Philippine Stock Exchange, a move that could also lure Chinese investors to invest in the local stock market, a top executive said Monday.

PSE president and chief executive Ramon Monzon said in a speech during a forum organized by the Shareholders Association of the Philippines that negotiations with SSE were a part of the plan to reduce brokers’ ownership in the stock exchange.

“Part of our drive to drive down brokers’ ownership to 20 percent is we will be offering additional shares in terms of stock rights and follow-on offering. We are talking to a regional exchange, specifically Shenzhen Stock Exchange to invest in the PSE,” Monzon said.

Monzon said SSE’s possible investment in PSE would be limited five percent as provided for under the Securities Regulation Code.

Under the SRC, no individual can own more than 5 percent of the exchange and no single business group can hold more than 20 percent. Read more

If one of the Zobels led PH

By Francis Lim (Philippine Daily Inquirer) | 21 September 2017

Last August 31, the Shareholders’ Association of the Philippines (SharePHIL) held its 4th annual summit at the Dusit Hotel in Makati City.

The summit featured the famous brothers of the Ayala Group, Jaime Augusto and Fernando Zobel de Ayala.

The occasion was a rare feat for any organization: It was the first time the Zobel brothers spoke jointly as principal speakers in one forum. SharePHIL was indeed honored by this distinct privilege. Read more

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