PSE eyes new trading rules by June 2009

The Philippine Stock Exchange (PSE) has drafted a fresh set of trading rules, which it plans to implement within the first half of 2009, to boost investor base and increase market turnover.

The set of rules will be introduced along with a new trading system, the bourse said.

The rules are subject to review by trading participants, whose comments will be compiled by the PSE until January 17 next year. The same will be submitted to the Securities and Exchange Commission for approval.

Under the new guidelines, there will be a pre-open period at 8 a.m., to be followed by the market opening at 9:30 a.m. A two-hour recess, starting at 12 noon, will happen and the market will resume at 2 p.m. The market will close at 4 p.m. following a pre-close period at 3:40 p.m. The PSE may effect changes to this schedule as the circumstances warrant, it said.

The trading floors in Ayala and Ortigas will also be open from 8 a.m. to 5 p.m. unless the exchange decides otherwise.

PSE president and chief executive Francis Lim said the move will attract more investors overseas.

According to him, the PSE has received several requests from overseas Filipinos on the extension of the trading period.

"We were in Abu Dhabi and one overseas Filipino worker who is already an active investor in our market told me that he always wakes up at 5 a.m. just to meet the opening of the Philippine market because of the time difference," Lim said.

"We are lagging behind our counterparts abroad. If we extend the trading hours, let’s say for another two hours, then more players will come in and take part in the local trading," he added.

The Association of Securities Analysts of the Philippines (ASAP), for its part, lauded the move saying it is a way of keeping up with other global players.

ASAP president Francisco Liboro noted that once the new rules are implemented, "we will have the same hours as Hong Kong and we can also witness the start of trading in Europe."

"Why is it good? Because we will be more accessible to foreign funds," added Liboro.

In 2002, the PSE tried afternoon trading but stopped it after eight months because it failed to increase market activity. The extended hours, from 1 p.m. to 2:30 p.m., apparently coincided with the mid-day trading break of exchanges Malaysia, Singapore, Indonesia, Hong Kong and Thailand.

"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."