The local bourse will explore possible reforms aimed at allowing more small, medium and emerging (SME) firms to go public, President and Chief Executive Officer Hans B. Sicat said in an interview.
For instance, the PSE can consider creating a separate board for start-up companies instead of loosening the listing rules and requirements further, Chief Operating Officer Roel A. Refran told BusinessWorld separately.
“I floated the idea of considering, for example, having a board that would allow more start-ups, but that has not reached the [PSE] Board yet,” Mr. Refran said.
At present, the PSE allows for the listing of companies with a minimum capital of P500 million on its main board. Those with at least P100 million, of which at least 25% must be subscribed and fully paid, may join the so-called Small, Medium and Emerging (SME) board.
“Other countries, like India, are very lax with SMEs but they only allow institutional buyers to buy and let the secondary market do its thing. Here, it’s different because we allow retail investors to invest in SMEs so we need to be a bit strict,” Mr. Refran said.
In this light, the PSE supposedly requires the smaller companies to present a track record. This requirement effectively bars start-up companies from accessing the equities market.
“So, the idea is to have a separate board for start-ups because a start-up, number one, really has no track record,” Mr. Refran said.
“I was thinking along those lines — maybe there would be merit because we see a lot of start-ups nowadays finding their home in Singapore. We want to attract them to do fund-raising here as long as the risks are communicated,” Mr. Refran added.
Setting up a separate board for start-up companies, however, remains beyond the sight of the exchange for now, Mr. Sicat noted.
“Probably not at the moment although we are trying to figure out how one can widen the rules — maybe a special board or special set of rules — but right now, we’ve only loosened up the rules in terms of renewable energy, PPP (public-private partnerships) listing,” Mr. Sicat said.
“We’re starting at the right direction,” the bourse official added, with the PSE targeting to launch within the year a mentoring program, in partnership with certain industry associations, to help SME companies advance their plans of going public.
Alterra Capital Partners, Inc., Italpinas Development Corp., Makati Finance Corp. and Xurpas, Inc. currently comprise the SME board. At least three others are seeking to join the list, namely gaming application developer Xeleb Technologies, Inc., restaurant operator Gweilo Corp. and technology firm Audiowav Media, Inc.
“I think one of the most important things for going public is you have a currency to acquire or a currency wherein you can borrow again. That’s where the value of being listed is just more than fund-raising,” Mr. Sicat noted.
