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PHILIPPINE COMPANIES are “at par” with their Southeast Asian peers in terms of corporate governance, particularly in disclosing transactions to shareholders, investment guru Mark Mobius yesterday said.
But more shares should be listed on the stock exchange coupled with more frequent and detailed reports to investors to move the Philippines away from a mere “frontier” market seen as fraught with volatility, he said.
“Listed companies [in the country] have generally been quite good in the treatment of shareholders in terms of transparency and so on,” Mr. Mobius, the executive chairman of investment management firm, Templeton Emerging Markets Group, said in a briefing.
“The Philippines is at par, maybe a little better than other companies in the region,” he said.
But more efforts are needed to boost the Philippines’ reputation among portfolio investors.
“The Philippines is a frontier market and an emerging market. Frontier market is a subset of the emerging market,” Mr. Mobius said, explaining that such are characterized by a volatile and riskier environment.
“The bottom line is more shares … The listed companies [should be] issuing more shares and new companies [should be] listing,” Mr. Mobius said.
“[And] to improve the ranking or maintain it, the businesses have to communicate more. You have to get out and have a dialog with shareholders maybe every quarter,” Mr. Mobius said.
Mr. Mobius also said the firms should “present facts and figures which make a comparison of your company and other companies in general.”
“Unless you have good corporate governance, you have a very real risk of losing all your investments,” he said.
The Philippine Stock Exchange (PSE), for its part, said it expects trading volume to increase in the short-term as the 10% minimum public float rule will take effect on Nov. 30.
“The PSE has reinstated the minimum public float to encourage the companies to sell more shares in the local stock exchange,” Argel G. Astudillo, vice-president of the PSE’s Corporate Governance Office, said in an interview.
Mr. Astudillo further reiterated that the PSE is slated to talk to and encourage 10 listed companies with the highest corporate governance scores to join the so-called Maharlika Board in September that will showcase firms that comply with high governance standards.
“The Maharlika Board will attract foreign investors,” Jesse O. Ang, resident representative of the International Finance Corp., said in an interview yesterday. — Neil Jerome C. Morales
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Source: Business World, July 27, 2011
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