BIZ BUZZ: Short selling in short demand

Three decades in the making, the Philippine Stock Exchange (PSE) officially launched short selling this week, although early data are showing take-up has fallen short of expectations, with zero such transactions recorded in the two days since the official launch.

Demand is there, several brokers told Biz Buzz, but depressed market conditions were less than ideal, the processing of documentary requirements for clients could take weeks and some brokers needed to invest in new systems upgrades.

A few of the brokers said a wait-and-see approach was best and they were happy to let their competitors go first while others were unsure whether the required systems upgrades were worth it.

COL Financial Group, the country’s leading stock broker, said short selling was not yet available as they need a new system to implement this.

Even with this out of the way, the brokerage house might limit the product to institutional clients or more sophisticated investors due to the significant risks involved when shorting stocks. This was something South Korea also highlighted when it banned short selling until June next year.

PSE president Ramon Monzon, who played an instrumental role in introducing short selling in the country, tempered expectations. He said on Tuesday the new product is “not a cure-all for market liquidity but a necessary step and building block towards developing other products such as derivatives”.

“Moving forward, the important thing to note is we are no longer a ‘long only’ market, and the ability to take the short view will allow investors to hedge their long positions or profit from stocks which they think are overvalued,” he said.

So far, 16 brokerage houses had registered master securities lending agreements with the Bureau of Internal Revenue, according to the exchange.

Mike Macainag, head of retail equities at Maybank Securities, was among those who committed to offer short selling and they intend to roll this out to clients as soon as the first quarter of 2024.

“I see it as opportunity for the market. Not just for profit but to boost the liquidity. The bears and bulls are finally going to come out and fight for the true value,” he told Biz Buzz. —Miguel R. Camus

PH startups rule HK tilt

Startup Mayani, which delivers fresh produce from small farmers to homes and businesses, made the Philippines proud at the Asia Technology Entrepreneurship Conference (ATEC) 2023 Startup Competition held in Hong Kong on Nov. 4.

Mayani, led by cofounders JT Solis (who is also its CEO) and Jeff Barreiro, won the emerging solutions track at the competition and likewise bagged the “Impact Award.”

Another local startup, financial services provider Kayamo, also brought honor to the homeland by winning the “Audience Favorite Award.”

“Mayani emerged as a trailblazer not only winning in its track but also clinching the Impact Award, showcasing the compelling potential of scalable, equitable emerging market solutions. And of course, your love for Kayamo as the Audience Favorite reflects the community’s shared vision for transformative tech,” ATEC 2023 said on LinkedIn.

“These promising startups are painting a bright future of innovation, steering the region towards a new era of tech-driven growth and prosperity,” it said.

As earlier reported in this space when these startups reached the ATEC 2023 finals, both Mayani and Kayamo had been nominated by Harvard Club of the Philippines Global. These were among the 12 startups handpicked from 86 entries recommended by various alumni groups in Asia Pacific.

ATEC, Asia’s largest university alumni club-led technology conference and startup competition, was founded by the Hong Kong and South China University and the business school alumni clubs of Harvard, Columbia, MIT and Stanford.

Harvard Club of the Philippines, in particular, has made it part of its mission to promote homegrown startups globally. —Doris Dumlao-Abadilla