Stock exchange set to extend trading hours

LONGER HOURS Afternoon trading will soon be reintroduced at the Philippine Stock Exchange to align the local market with the rest of the world.. AFP FILE PHOTO

The new board members of the Philippine Stock Exchange want to extend trading hours well into the afternoon to broaden investors’ participation in the local equities trade.

In a meeting on Wednesday, members of the board arrived at a consensus to reactivate the policy on afternoon trading to “align” local markets with the rest of the world, PSE’s new chairman Jose Pardo said in an interview.

According to Pardo, a former head of the finance and trade departments, the mechanics governing the extended trading hours will have to be drawn up in the next few weeks.

Pardo told the Inquirer that a committee had already been created to study this policy so that the board could discuss the fine print in its next meeting.

He said the PSE under its president, Hans Sicat, hoped to extend trading sessions by the second half of this year.

Currently, local equities trading starts at 9:30 a.m. and ends at 12:10 p.m.

The board is now studying whether it will be feasible to extend trading hours, starting at 2:30 to 4:30 p.m. But according to Pardo, the exact hours have yet to be worked out. He explained that it would be best to look at how other markets in the region were doing before taking a step.

Pardo noted that the PSE had already approved a resolution to revive longer trading hours in 2008, but this was shelved due to unfavorable economic conditions prevailing at the time.

In 2008, global commodity prices were soaring, badly affecting the Philippines, a net importer of crude oil and rice. The following year, the financial crisis erupted, sending shock waves from Wall Street to other global economic centers.

When he assumed the position of PSE chairman in May, Pardo said that boosting trading liquidity in the stock market would be one of his main goals. With the Philippines now widely believed to be in a “sweet spot” in terms of economic fundamentals, the PSE is confident that it will succeed in attracting liquidity by extending trading hours.

Pardo said the PSE had been mindful of cost-benefit implications, but the initial increase in cost on the part of the exchange and the trading participants could eventually be offset by the likely increase in trading volume.

The PSE implemented longer trading hours in early 2000, but this policy was later scrapped.