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WEALTH MANAGEMENT | Cesar Tordesillas, Philippines

Fund manager warns against Philippine foreign ownership rules

Lazard Asset Management warned that foreign ownership ruling for PLDT may negatively impact the country.

The firm, with almost $1 billion invested in the Philippine capital markets, told the Securities and Exchange Commission that it is providing feedback on the calculation of foreign ownership for PLDT as an independent minority shareholder of PLDT representing the interests of sovereign wealth funds, global institutions, and endowments.

As PLDT shareholder for over a decade, Lazard said “we would like to continue to own shares on the behalf of our clients, but may be forced to sell our holding if the regulation changes.”

“We believe that the limit on foreign ownership should continue to be calculated as a percentage of total shares outstanding as opposed to being segregated by share class,” Lazard portfolio manager Rohit Chopra and analyst Elizabeth Chung said.

It added that, “the new proposal, we believe, is unfairly grouping our passive interests with those of possible foreign strategic investors.”

The SEC expects to come out with the second version of its rules on foreign ownership in the first semester of 2013 even as it continues to receive suggestions for revision from stakeholders opposing the stringent rules.

Among the issues raised by stakeholders include the definition of the foreign ownership cap. A recent Supreme Court ruling required to computation using both voting and non-voting shares while the previous practice was to count only voting shares.

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