PSE mulls return to original trading schedule

The Philippine Stock Exchange (PSE) can’t seem to get its act together on the schedule of the trading hours in the bourse.

Three months after a survey by the Floor Trading and Arbitration Committee (FTAC) showed majority of the brokers favoring a retention in the present schedule which extends up to 2:30 p.m., another survey is set to be undertaken to determine if the PSE members would favor another change in the trading hours.

Last Feb. 20, the PSE stretched the origional trading schedule from 9:30 a.m. to 12 noon by an additional one and a half hours, or from 1 p.m. to 2:30 p.m., with the expectations of attracting more volume, particularly from foreign brokers, as the local market aligns itself with the operations of other bourses abroad.

But except for the positive reception in the first few days of its implementation, the extended trading schedule has so far failed to bring in more volume, prompting the PSE board – with the prodding of foreign brokers – to seek another possible rescheduling to a 2-4 p.m. extension.

In a report, the FTAC cited that when the afternoon trading session took effect last Feb. 20, "there was no substantial increase in the trading volume; in fact, the trading volume was much higher during the period before the afternoon trading session was adopted, that is from early Jan. 2002 to mid-Feb. 2002."

It pointed out that since the start of extended trading, majority of the brokers have incurred additional expenses with no appreciable increase in revenue, not to mention the increase in costs on the part of the PSE. Because of the current low trading volume, several brokers have in fact discontinued the use of their off-site terminals to reduce costs, the committee added.

However, in the mid-April FTAC poll, more than half or 51 percent of the brokers surveyed thumbed down the proposal to reschedule trading, opting instead for a status quo. Only 21.5 percent favored the rescheduling from 2 to 4 p.m.; 19 percent voted for the slight change from 1:30 p.m. to 3 p.m.; while 8.5 percent did not indicate any preference.

In the proposed survey, the member-brokers would be asked if they would favor reverting to the original 9:30 to 12 noon trading hours or consider the 2-4 p.m. extension, which means the existing schedule extending until 2:30 p.m. would be changed.

PSE sources said it would also be possible that even if the market reverts to the morning-only session, an extension would automatically be put in place once the volume of trades reaches a certain "trigger point," to take advantage of the upward trend carrying over until the afternoon.