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PSE postpones stock rights offer due to ‘unfavorable’ conditions

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People pass through a hallway inside the Philippine Stock Exchange building in Makati. -- BW FILE PHOTO

THE Philippine Stock Exchange, Inc. (PSE) has postponed its P3.16-billion stock rights offer to March, citing unfavorable conditions among global markets that has affected the local bourse. 

In a disclosure on Thursday, the PSE said the stock rights offer will now start on March 12 and end on March 16. It earlier announced the offering will run from Feb. 26 to March 2. The price of the offer meanwhile will be determined on Feb. 23, rather than on Feb. 9. 

“The PSE has decided to adjust the schedule of its stock rights offering given the unfavorable global market conditions affecting the domestic capital market,” the company said.

Global markets have fallen this week as a reaction to higher bond yields, with 10-year bonds reaching 2.84% on Wednesday. Markets are expected to remain volatile, as the trading public dumps investments in equities in favor of bonds. 

The global sell-off has prompted the Dow Jones Industrial Average to wipe out its gains of around 500 points since the start of the year, losing as much as a thousand points on Feb. 5, before paring down losses but still closing lower on Wednesday at 24,893.35, lower by 0.08% or 19.42 points.

The 30-member Philippine Stock Exchange index (PSEi) has been tracking the developments of its counterparts abroad, falling back to the 8,300 level at the middle of trading last Feb. 6, after reaching a record high of 9,058.62 at the end of January.

On Thursday, the PSEi closed 0.25% lower to 8,645.08.

The PSE will be offering up to 11.5 million shares priced at P275 apiece in its stock rights offer. Half of the P3.12-billion projected net proceeds will be used for its acquisition of the Philippine Dealing System Holdings Corp.

The remaining funds are set to be used for general corporate purposes, as well as for the introduction of new products until 2020.

The fund-raising activity will likewise help the company bring down broker ownership to less than 20%, which is needed to secure the Securities and Exchange Commission’s approval to merge the PSE with the fixed-income bourse.

The PSE-PDSHC merger is a deal five years in the making now, with the PSE proposing to merge the capital markets back in 2013 to achieve synergies in operation.

The company recorded an 18% growth in earnings in 2017 to P825 million, boosted by higher trading activity and one-time gains from the sale of its Tektite office in Ortigas.

Shares in PSE were flat at P238 apiece on Thursday. — Arra B. Francia