MANILA, Philippines - The Philippine Stock Exchange has approved a plan to extend to the afternoon its trading hours as part of its overall strategy to increase market liquidity and elevate its practices to global standards.
As approved by the PSE Board, the PSE’s morning session will be 9:00 to 9:30 a.m. (pre-open) and 9:00 to 12 noon (morning trading). But under the Board-approved plan, the PSE will resume trading from 2 p.m. to 4:00 p.m. with a 10-minute run-off period from 3:50 to 4:00 p.m. In-between the morning and afternoon sessions, the PSE will observe a two-hour break from 12 noon to 2 p.m.
The new trading hours is expected to be implemented on or before June 30, 2009.
Francis Lim, PSE president and chief executive officer, said that the Board also decided that the afternoon session will be conducted through off-floor trading.
“The decision of our Board to extend the trading is part of a coordinated strategy to level our Exchange with its peers in the region and develop our local stock market to its full potential," Lim said.
“It is also a response to observations from foreign investors who pointed out that since the Philippine stock market is small, they first look at the bigger markets in the morning but by the time they get the opportunity to look at our market, the PSE is already closing, so why bother at all," added Lim.
He added that the afternoon trading session is also aimed at preparing the PSE to take full advantage of market-friendly legislation that is being put in place by the government such as the Personal Equity Retirement Account (PERA) Law.
The PERA Law, which was recently signed by President Gloria Macapagal-Arroyo, gives tax incentives to people who invest portions of their retirement funds in the stock market.
“With the extended trading hours, overseas Filipino workers in the Middle East can now catch our market live through our online brokers," Lim said. “And they can invest in our market with special incentives they will get from the newly-enacted PERA Law.
“I vividly recall one overseas Filipino working in Abu Dhabi who said that he has to wake up at 5:00 o’clock in the morning just to be able to trade in the Philippines because the PSE is open only up to 12 noon. With the special incentives for them under the PERA Law and afternoon trading hours, we hope to tap overseas Filipinos as active players in our stock market," he added.
Asian investors will also find the overlap advantageous, because the afternoon session will allow them to catch the trading hours in Asian and European markets such as Euronext, Deutsche Boerse, OMX, Bolsa de Madrid, and the London Stock Exchange.
“The implementation of the extended trading hours will coincide with our timetable in commissioning our new trading system next year which is tentatively scheduled to go live on or before June 30, 2009," he pointed out.
The PSE tried in 2002 to hold an afternoon trading but it stopped after eight months. The extension then was very limited as it only extended from 1 to 2:30 p.m. Moreover, the extension under the previous attempt coincided with the mid-day trading break of exchanges in Malaysia, Singapore, Indonesia, Hong Kong and Thailand. Worse, it caught up with the overall market decline around the same period.
“Times have changed. We have to consider also that markets are much different now as trading has become more global," Lim said. “But we decided to implement the extended trading hours next year to give the PSE market players enough time to make necessary adjustments in their operations." - Cheryl M. Arcibal, GMANews.TV
Source: gmanews
As approved by the PSE Board, the PSE’s morning session will be 9:00 to 9:30 a.m. (pre-open) and 9:00 to 12 noon (morning trading). But under the Board-approved plan, the PSE will resume trading from 2 p.m. to 4:00 p.m. with a 10-minute run-off period from 3:50 to 4:00 p.m. In-between the morning and afternoon sessions, the PSE will observe a two-hour break from 12 noon to 2 p.m.
The new trading hours is expected to be implemented on or before June 30, 2009.
Francis Lim, PSE president and chief executive officer, said that the Board also decided that the afternoon session will be conducted through off-floor trading.
“The decision of our Board to extend the trading is part of a coordinated strategy to level our Exchange with its peers in the region and develop our local stock market to its full potential," Lim said.
“It is also a response to observations from foreign investors who pointed out that since the Philippine stock market is small, they first look at the bigger markets in the morning but by the time they get the opportunity to look at our market, the PSE is already closing, so why bother at all," added Lim.
He added that the afternoon trading session is also aimed at preparing the PSE to take full advantage of market-friendly legislation that is being put in place by the government such as the Personal Equity Retirement Account (PERA) Law.
The PERA Law, which was recently signed by President Gloria Macapagal-Arroyo, gives tax incentives to people who invest portions of their retirement funds in the stock market.
“With the extended trading hours, overseas Filipino workers in the Middle East can now catch our market live through our online brokers," Lim said. “And they can invest in our market with special incentives they will get from the newly-enacted PERA Law.
“I vividly recall one overseas Filipino working in Abu Dhabi who said that he has to wake up at 5:00 o’clock in the morning just to be able to trade in the Philippines because the PSE is open only up to 12 noon. With the special incentives for them under the PERA Law and afternoon trading hours, we hope to tap overseas Filipinos as active players in our stock market," he added.
Asian investors will also find the overlap advantageous, because the afternoon session will allow them to catch the trading hours in Asian and European markets such as Euronext, Deutsche Boerse, OMX, Bolsa de Madrid, and the London Stock Exchange.
“The implementation of the extended trading hours will coincide with our timetable in commissioning our new trading system next year which is tentatively scheduled to go live on or before June 30, 2009," he pointed out.
The PSE tried in 2002 to hold an afternoon trading but it stopped after eight months. The extension then was very limited as it only extended from 1 to 2:30 p.m. Moreover, the extension under the previous attempt coincided with the mid-day trading break of exchanges in Malaysia, Singapore, Indonesia, Hong Kong and Thailand. Worse, it caught up with the overall market decline around the same period.
“Times have changed. We have to consider also that markets are much different now as trading has become more global," Lim said. “But we decided to implement the extended trading hours next year to give the PSE market players enough time to make necessary adjustments in their operations." - Cheryl M. Arcibal, GMANews.TV
Source: gmanews
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