PSE amends rules to temper fall of stock prices

With the COVID-19 pandemic causing a historic stock market crash, the Philippine Stock Exchange (PSE) has tweaked its trading rules to temper the fall of listed companies.

In a memorandum dated March 21, PSE president Ramon Monzon said they had obtained approval from the Securities and Exchange Commission to amend the lower static threshold from 50 percent to 30 percent below the previous close or the last adjusted closing price.

“We are looking at measures to address the volatility in the stock market. One of the measures we decided to adopt is the tightening of the trading band for securities,” Monzon said.

The new rule will take effect on Tuesday, March 24.

“We benchmarked the adjusted lower static threshold le­vel with what other exchanges in the region currently implement, which is between 10 and 30 percent,” Monzon said.

It means that in a day, a stock can go up by as much as 50 percent but it cannot go down by more than 30 percent anymore.

The market saw its worst week in history last week as the two-day market shutdown aggravated concerns over COVID-19. The worst beating happened on Thursday, when the Philippine Stock Exchange index lost 711.95 points or 13.34 percent after a two-day lockdown.

The PSE has a circuit-brea­ker that prompts an automatic 15-minute trading halt if the main index falls by over 10

percent.

In the last two weeks, the stock market has lost about P4.3 trillion in market capita­lization. INQ