THE Philippine Stock Exchange (PSE) will extend trading hours starting October to try to boost trading volumes and match the hours of other Southeast Asian exchanges it will be linked with next year.

The extension will come in 2 phases. In October, trading will go from the current 9:30 am to noon schedule to 9:30 am to 1pm. Then starting January, trading will be from 9:30 am to 12 noon and then 1:30 pm to 3:30 in the afternoon.

PSE president Hans Sicat and others said much consultation went into the decision, which may strain some brokers. Some smaller brokers devote the afternoon to paper work. Brokers of all sizes use the afternoon to talk to clients.
Sicat said the exchange decided it needed to extend trading hours to allow volume to increase rather than wait for volume before extending the session.

It won’t be the first time the exchange has extended its hours. It did so in 2002 but reverted to the current schedule in less than a year after volumes failed to pick up much.

“Trading extension is one of those steps that we think will assist in terms of improving liquidity,” Sicat said in an ABS-CBN News Channel interview. “The big debate is what is which comes first, like a chicken and egg decision. Is it extending trading hours or getting more volume? I guess from our point of view, we believe that these go hand in hand.”

Sicat said the exchange will help smaller brokers by keeping its floor open. He also said the extension ends at 3:30pm to give brokers some time for client work.

“The general view is that at some point we will have to extend trading hours in any case,” Sicat said. “So obviously there were some who had some conditionalities and concerns but in terms of that the PSE is also trying to lend a helping hand. We’re helping some of those brokers who need space by saying we’ll keep our physical trading floor open during these hours.”

“The other issue we tried to address: clearly there’s a lot of work for settlement, clearing and just dealing with your own clients after trading hours. So even the second phase doesn’t push it to late afternoon but gives these brokers the chance to work with their clients before the early evening hours.”

The PSE board approved the new trading  hours in a meeting held on July 13. “This move will align the PSE with its peers in the region and is a positive signal that the local market is ready to take off. Afternoon trading is also expected to boost liquidity as it enhances the ability of investors to react to developments in other markets in a different time zone,” Sicat said.
Value turnover year-to-date is averaging P5.30 billion daily. The PSE Index reached a new all-time high on July 5 at 4,439.61 points.

“We are cognizant of the benefits of extended trading, and we are also well aware of the challenges that it provides. We are optimistic that with the initiatives we have put in place prior to this move such as a new trading system, introduction of new products to boost volume, regulatory approvals, and more listings and follow-ons, we will be able to enhance investor interest in the stock market,” Sicat said.

“This initiative requires the help and participation of all stakeholders and we are grateful for the active support of the trading participants,” the PSE executive added. --With  abs-cbnNEWS.com