Taking stock in Manila

Taking stock in Manila

An extreme sports enthusiast away from the office, PSE chief Hans Sicat is a calm and deliberate player in the boardroom.

The spacious room where I was scheduled to meet my distinguished visitor from the Philippines was packed with conference delegates gathered for light refreshments during a coffee break. Among that busy crowd, a calm, earnest man in a pinstriped charcoal suit smiled brightly when we were introduced.

"Being CEO of the exchange, I have a wider range of stakeholders and competing interests. The tougher decisions are usually the human resources issues where you have to investigate a particular broker because of the behaviour of an individual, or let go an employee because of their unethical behaviour"

Hans Brinker Makasiar Sicat, the president and the chief executive officer of the Philippine Stock Exchange, had just finished taking part in a discussion at the Insights Asean Summit, organised by the Young Presidents' Organisation. Now he was ready for questions of a more general nature.

As we made small talk to break the ice, naturally the origin of his unusual Dutch name Hans Brinker came up. He told us it came from the classic novel Hans Brinker; or, the Silver Skates, which his mother read during a long recuperation from a back operation many years before he was born.

"She was in a cast for eight months and the only book that made her feel like she wasn't in pain or discomfort was this one," he recalled. "So from that day on, my mother told herself that whenever she had a son, she would name him after this book."

Born in Boston and raised in the Philippines before returning for higher education in the United States, young Hans grew up with his sister in a family where the dinner table was an ideal place for debate and discussion between their parents — an economist and a political scientist.

"Although we had very little clue regarding the topics being discussed, it was a good way for us to get an informal education," he said with a smile.

In addition to his mother and father for educational discussion, Mr Sicat said he had been fortunate to have so many strong, positive role models, including his grandfather for invaluable life lessons and previous bosses who were very open-minded.

"I'm very thankful to all my bosses throughout my career as they gave me the opportunities to do things, meet people and allow me to succeed — and fail — along the way," he said. "All of this has been extremely good experience for my career."

Entering his fifth year at the PSE helm, he sees a bright future ahead.

"Although the Philippine Exchange is still a small one relative to others in Asean, I think we are the fastest growing in Asean, both the economy and the exchange, and that's good because that will allow us to catch up with Singapore, Thailand and Malaysia," he said. "We look at the Asean Exchange as our benchmark."

The PSE is one of seven Asean markets participating in the Asean/FTSE Index, which has 180 constituents and aims to draw both regional and global investors to increase their exposure to Southeast Asian markets.

As well, the Manila bourse hopes to soon join the Asean Trading Link, which now consists of the Bangkok, Kuala Lumpur and Singapore markets. It allows investors to trade shares on member markets through a single contact point.

He believes it is important for the Philippines to remain competitive with the rest of Asean. "We have to catch up in areas where we are behind but the good thing about the Philippines is that we are adaptable and we like to get up to speed," said Mr Sicat. "We are generally flexible when it comes to getting to a certain objective.

"We have been able to introduce a lot of positive changes [in the PSE] by bringing in more listings, new products and introducing services as well as hiring younger staff from the financial services sector domestically and internationally," he said. Although the PSE has shown a satisfactory improvement in line with the macroeconomic situation, Mr Sicat says more work is needed.

One of the areas he is most keen on improving is corporate governance — transparency, rules and fairness. "Listed companies have not grown as fast because we are also trying to delist the non-performing companies and bad companies, mostly for cleaning up," he explained. "Now there are 261 firms listed. Before there were a lot more but the quality now is a lot higher," he said.

Based on average daily trading turnover, one metric to measure the quality and appeal of a stock market, the PSE is heading in the right direction. "The rate has more than doubled over the last two and a half years."

Operating continuously since 1927, the PSE is one of the oldest bourses in the region but it has long been considered small and relatively illiquid. Market capitalisaton is around 14 trillion pesos while average daily turnover is around 10 billion pesos, equivalent to 7.4 billion baht, about one-seventh the average on the Stock Exchange of Thailand. However, investor interest is on the rise.

"In the past, the Philippine market was viewed as an old boys' club, but that is changing. Today, deals of the size of $1 billion can be easily done," Mr Sicat told the Thomson Reuters publication IFR last year.

Foreign investors on the PSE account for about 50% of the total but there are still some constraints related to old rules that need to be revised, in his view.

"In some industries, they have to be 100% owned by Filipinos," he said, "Those laws were probably built for the 18th century which didn't recognise the fact that capital flows freely across borders with modern technology. Some of them have to be adjusted to reflect the 21st century."

With the arrival of the Asean Economic Community fast approaching, Mr Sicat knows that that there will be winners and losers, but nonetheless it will be an important milestone for all countries involved.

"We know that there will be some people who will be displaced because some small companies will not be able to compete and they are going to have a hard time, but we hope that we will increase the chance of everybody succeeding, and I'm very excited for the prospects of the PSE and overall growth."


With more than two decades of experience at investment banking firms before he joined the PSE, Mr Sicat has reached an enviable position at age 54, but he says his career path wasn't always strewn with rose petals.

"When I first started as a young analyst associate, my working hours were extremely bad and I was wondering whether it was worth it," he said, recalling constant pressure and deadlines. "It's 2am and I've still got so much left to do. There's no alternative — you just have to get to work."

Life before the PSE included spells with international firms such as Citigroup and its predecessor Citicorp as well as Salomon Brothers in the Philippines, Hong Kong and New York City.

"The tasks that I was asked to do became more complicated and the geographic coverage was all changing, and along with the change in geography, there was also a change in the products that we focused on."

From the beginning, he also knew that he had to adjust his personality because being reserved or shy wasn't an option for the career path he chose.

"I had to get rid of my shyness because the best skill for an investment banker is the ability to communicate with others and being able to articulate certain things," he said. "You need to ask a lot of questions — everything from A to Z, because the reality is that before anyone can come up with a solution, they need to know what the actual situation really is."

Having Mahatma Gandhi as a role model, Mr Sicat has kept in mind the virtues needed to be a great leader as he climbed the ladder to where he is now.

"What amazes me is that he [Mahatma Gandhi] was a relatively simple guy who didn't have to possess a lot of material things, but he could certainly make a difference in the world and could positively influence many people through his thought leadership."

Mr Sicat has adopted the timeless concept of "servant leadership", by trying to share power and consider the needs of his people while influencing them to perform better, instead of accumulating and exercising power from the top of the pyramid.

"I'm a thoughtful deliberator," he said. "I don't make rash decisions. I always evaluate and think about things. My style is more collaborative and I try to explain things without having to have a bombastic voice.

"You don't have to be shouting and ordering people around to get things done, you just have to explain what the goal is and what is needed to be done."

Mr Sicat said that he may not be hard or autocratic, but he still has high expectations of his team. He believes in setting deadlines and always measuring and benchmarking people.

"Being CEO of the exchange, I have a wider range of stakeholders and competing interests," he said, noting that the tough decisions as a leader are not necessarily technical or financial in nature.

"The tougher decisions are usually the human resources issues where you have to investigate a particular broker/dealer because of the behaviour of an individual, or let go an employee because of their unethical behaviour."

As the conversation approaches its end, the calm-looking Mr Sicat surprises us when he talks about life away from the office. Over 25 years of marriage, he said, he and his wife have always been active daily exercisers. Running and playing tennis together are part of the mix — but diving with sharks? Well, he does work in the stock market, after all.

"My wife and I signed up for a Special Forces drill in Israel, my son and I went to the Australian Rappel, in which we jump down facing the ground, and recently we took our family to Alaska," he said.

"We sign up for most active things — skindiving in icy water, climbing a 50-metre ice wall and scuba diving with sharks."

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