The surprise? A potential partial stake sellback in PDS’ bond exchange, Philippine Dealing & Exchange Corp. (PDEx), to an influential group of banks.
PDS takeover a decade in the making
For Monzon, it caps an eight-year tenure leading the stock exchange through the turbulent pandemic era and overseeing reforms that created new services and products, although persistent market volatility has often led to lackluster returns for investors.
Monzon’s work is not yet done despite tough negotiations with PDS’ shareholders that stretched into the holiday season.
PSE open to strategic sale
The PSE chief revealed that the powerful Bankers Association of the Philippines—the single-largest selling shareholder of PDS—expressed an interest to carve out and acquire PDEx since banks were the primary users of the platform.
“I said to them I’m prepared to sell up to 49 percent of PDEx. But under the Securities Regulation Code, they’ll need to get approval of the Securities and Exchange Commission for that,” Monzon told InsiderPH in an interview on Thursday, Jan. 2.
He said the exchange is also willing to share governance of PDEx with the banks, but PSE should keep a controlling stake.
“I told TG [BAP president Jose Teodoro “TG” Limcaoco] we have a commitment to you to sell, but I can’t move without the SEC,” he added.
BAP confirms interest in PDEx stake
Limcaoco, who is the president and CEO of Bank of the Philippine Islands, said the BAP is keen on investing directly in PDEx.
“I can confirm that banks are interested to take a stake in PDEx together with PDS/PSE to help develop the debt capital market,” Limcaoco told InsiderPH.
In July last year, PDEx president and CEO Antonino Nakpil said they were on track to doubling bond listings to about P400 billion in 2024.
Tough negotiations
This time, Monzon secured concrete regulatory approvals before proceeding with negotiations—a deliberate move to avoid the missteps that derailed attempts during past administrations.
On the PSE’s end, a board committee was formed that was composed of Andrew Gan, Wilson Sy, and Marilyn Victorio-Aquino.
“Negotiations can be tricky. The trickiest part of any negotiation is price, and that took a while to really manage since we have our own valuation, which we knew would be far apart [from the sellers]. And it was far apart,” he said.
“But what made negotiations smooth is that for BAP, I was only negotiating with one person, which was TG. And he’s a numbers guy, and I’m a numbers guy. We know the dynamics of the business, and we looked at it and, you might say, reached an understanding of what it is really worth,” he added.
PH government also agrees to sell PDS shares
Apart from the BAP, the Exchange signed share purchase agreements to acquire stakes in PDS from Singapore Exchange (20 percent), Whistler Technologies (8 percent), San Miguel Corp. (4 percent), Investment House Association of the Philippines (0.65 percent), and Golden Astra Capital (0.36 percent).
Monzon said Development Bank of the Philippines, the Social Security System, and Philippine Deposit Insurance Corp. have also agreed to sell their shares.
“But being government-owned corporations, I think they were advised by [the Commission on Audit] that they should go through a public bidding first,” he said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
