PSE to delist 27 firms if 10% Public Float rule not met

At least twenty-seven (27) publicly-listed firms, including San Miguel Brewery (SMB), Eton Properties Inc. (Eton), and First Metro Investment Corporation (FMIC), are facing possible trading suspension by next year, if they are unable to comply with the minimum public ownership requirement set by the Philippine Stock Exchange (PSE).

The stock exchange issued another memo last week reminding companies to abide by the 10% public float rule, unless they want to be delisted from the PSE starting January 2013.

What does it mean by Public Float or Minimum Public Ownership requirement?

The PSE requires publicly-traded companies to be really “publicly traded,” which means maintaining a minimum public ownership level of 10%, effectively ensuring that at least 10% of the firm’s outstanding stock are held by the general public and are freely available in the market.

Erring companies are given a grace period of until December 31, 2012 in order to comply. Those still unable to comply will have the trading of their shares suspended for 6 months, and subsequently delisted if still not complying after that period.

What is the impact of a trading suspension or delisting?

Trading suspension and, ultimately, delisting from the stock exchange would make the stock illiquid. Since the stock is not be freely traded, it will be difficult for buyers and sellers to complete a transaction. At the same time, in the absence of public trading, the “true” market-driven price of a stock will be difficult to determine.

In addition, stocks that are not traded on the exchange are slapped with higher capital gains tax. The regular capital gains tax rate for publicly-listed stocks is 1.5% while for non-publicly traded firms, this increases to 5% if the net capital gain is less than P100,000 and 10% if the net capital gain is above P100,000.

How can companies increase their public float level?

During the height of the 2007 financial crisis, the PSE lifted the public float rule to allow publicly-traded firms to buy back shares in order to prevent a price freefall. In recent years, however, stock prices have recovered but several companies continued retaining ownership of the shares that were bought back.

According to the PSE, the reintroduction of the minimum public ownership rule is in consonance with the meaning of a “publicly traded firm.”

“Whether none or all 27 companies make [the public float requirement], then you’re left with companies that are truly public,” says PSE President and CEO Hans Sicat.

To increase public ownership to the required 10% minimum level, companies can issue more shares to the public or sell back previously-bought stocks. Some firms, however, including the Ramon Ang-led businesses Pure Foods, San Miguel Properties, and San Miguel Brewery have said that they would simply “voluntarily delist” the shares if they are unable to comply.

Which 27 stocks are in danger of trading suspension? 

The following firms face possible trading suspension next year due to the low public ownership level.


Before the end of the year, we will revisit each stock’s public float level to check which companies have complied and which ones still have not.

Update (December 120, 2012): 25 PSE firms still below minimum public ownership level

About the Author

PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

4 thoughts on “PSE to delist 27 firms if 10% Public Float rule not met”

  1. Is this a good time to panic? nobody told us newbie investors of this kind of risk –“trading suspension” because of the lack of public ownership level. Can someone enlighten us about this situation or maybe write a blog or something.


Leave a Comment