ASIDE from gaining access to capital, there are a few other reasons for companies to go public.
Miguel Felipe Evangelista of the marketing services department of the Philippine Stock Exchange said companies also opt to enlist with them to save on their cash reserves and improve on their credit ratings, especially when they have maxed out on their credit limits.
In turn, companies end up having greater transparency, institute good governance, enhance their corporate image and expand business relationships.
Evangelista was one of the presenters during a series of seminars the PSE was sponsoring in Cebu since Thursday.
Evangelista added that by enlisting with the PSE, companies can also offer more incentives to employees via stock option plans. He also said employees tend to trust companies listed with the PSE because these are more transparent, keeping employee turnover at a minimum.
The PSE has 253 listed companies in six sectors--financial, industrial, holding firms, property, services, mining and oil, and small and medium enterprises.
He said though that SMEs are the smallest, having only two companies falling under the category.
However, he explained that the case for SME’s is that once they’ve enlisted, opportunities to expand are quick and that they eventually move up the board.
As an example, he cited the case for Pancake House, which had a book value of P10.32 million before enlisting with the PSE. Today, he said the company now has P2.81 billion capitalization, allowing them to expand faster and acquire other restaurants.
Evangelista also cited Cebuano-owned Aboitiz Equity Ventures, which had P3.86 billion
before listing and now has grown to P313.64 billion. Store chain Puregold has also experienced high gains, starting from P2.9 billion to P111.07 billion.
He hopes the examples he cited will encourage more companies to consider enlisting with the PSE.
Chief operating officer Roel Refran said they are working on programs to serve more clients and help them make better decisions on their investments.
He said their website posts corporate disclosures as soon as they get them while listed companies will be made to submit clarifications on reports about the company that are gathered from news reports or “heard from the grapevine.”