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SSS plans to increase PSE stake, eyes board seat

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By Arra B. Francia, Reporter

STATE-RUN Social Security System (SSS) is keen on getting a seat on the Philippine Stock Exchange’s (PSE) board of directors, expressing interest in the stock rights offering to be issued by the local bourse in order to increase its stake.

“We also want to get a seat in the PSE, since we’re such a big investor in stock and equities…It would be our listening post also in the market,” SSS Commissioner Jose Gabriel M. La Viña told reporters on the sidelines of a press conference with Megawide Construction Corp. last Friday.

The SSS executive answered in the affirmative when asked if they would participate in the PSE’s stock rights offering targeted to be issued from Feb. 5 to 9, with listing set on Feb. 23. The bourse looks to raise up to P3.16 billion from the offering of a maximum of 11.5 million common shares to eligible shareholders valued at P275 each.

SSS currently holds 197,140 shares in the bourse operator, according to a PSE report, which is less than 1% of total shares in the company.

Section 26 of Republic Act No. 8282, otherwise known as the Social Security Law, mandates the SSS to invest funds into private securities, infrastructure projects, real estate related investments, short and medium-term loans, foreign-currency denominated investments, and other industries.

Around 23% of SSS’s portfolio is now invested in equities, or P111 billion. Fixed-income securities account for bulk of its portfolio at 40%; 10% is in real estate properties, 6% in corporate bonds, and around 5% in bank deposits.

Aside from the PSE, SSS is also looking to get a seat in the board of Cirtek Holdings Philippines Corp. This is in line with the institution’s goal to invest in companies in high-growth sectors.

“We’re looking at companies that have strategic advantages, competitive advantages, they’re in industries that grow fast. With Cirtek, we’re still negotiating the price. (It would take) a few months. Mukha namang they’re really interested also,” Mr. La Viña said.

To date, SSS has P400 million worth of common shares in Cirtek.

SSS has recently been given a board seat in Megawide as part of a special accommodation, after it has increased its stake in the company to 5.17%. This comprises less than half of the required stake to get a board seat, or 12.5%. The state pension fund noted however that it is willing to hike its shares to double its current ownership.

Alongside its increased ownership in Megawide, SSS will also be taking part in an unsolicited proposal to rehabilitate the Ninoy Aquino International Airport with the engineering conglomerate. The Megawide-led consortium looks to submit the proposal by the first quarter of 2018.