THE Philippine Stock Exchange (PSE) is targeting the rollout of cross-border trading of both local securities and shares of foreign-listed companies via depository receipts (DRs) next year.
PSE President and Chief Executive Officer Ramon Monzon said the initiative would be launched in the fourth quarter of 2024 and after the bourse finalizes the regulatory framework with the Securities and Exchange Commission.
“These DRs will enable local investors to further diversify their portfolios. [DRs] will have underlying shares of foreign publicly listed companies at a one-to-one ratio,” Monzon said during a forum on legislative reforms for the local capital market.
“Underlying shares from both [the] PSE and partner exchanges will be identified by issuers based on liquidity and potential demand,” he added.
Cross-border trading, Monzon continued, is also expected to bring in additional liquidity as “issuers from other exchanges create DRs with Philippine-listed companies as the underlying asset.”
At the same event, meanwhile, House Speaker Ferdinand Martin Romualdez said the country’s economy would remain “vibrant” despite global headwinds.
“While factors such as the global economic slowdown and external environments have posed challenges, the resilience and adaptability of our economy persist, he said.
“For context, our growth this year is anticipated to surpass that of nations like Indonesia, Vietnam and Malaysia,” Romualdez said.
Despite the World Bank and other institutions having lowered their Philippine growth forecasts, he said the revisions remained “commendable.”
“This speaks volumes about the latent potential within our economy and capital markets as we endeavor to achieve our ambitious target growth rate of 6-7 percent,” Romualdez said.
That goal is in doubt as growth was just 5.3 percent as of the first half.
Romualdez said the passage of key legislative milestones, such as amendments to the Public Service Act that allowed full foreign ownership in crucial public services like telecommunications and airlines, underscored the commitment to creating a conducive investment environment.
He also urged businessmen to consider parking money in the Maharlika Investment Fund.
“I encourage our revered guests and esteemed partners to explore this investment opportunity, a venture that signifies shared growth and mutual advancement, propelling our nation toward an era of unparalleled economic renaissance,” Romualdez said.