PSE: Short selling progress hinges on market recovery
By Revin Mikhael D. Ochave, Reporter
THE PHILIPPINE Stock Exchange, Inc. (PSE) is not bothered by the slow progress of its short selling product, its top official said.
鈥淚鈥檓 not worried. As long as the short selling capability is there, that is the most important thing,鈥 PSE President and Chief Executive Officer Ramon S. Monzon told聽大象传媒聽on the sidelines of a launch event in Makati City last week when asked about the development of the market product.
The PSE launched short selling in November last year, five years after issuing the revised guidelines on the trading strategy. However, the latest daily short selling report posted on the PSE鈥檚 website showed that there have been no developments on the new trading product.
Mr. Monzon said the short selling product was introduced to entice more foreign investors to consider the local exchange.
鈥淓verybody is saying that this short selling doesn鈥檛 seem to have worked. We鈥檝e worked on short selling and it is really to target the foreign investors so that when the emerging market or the Philippine economy loses favor, instead of selling out, they can hedge. That will create liquidity,鈥 Mr.鈥塎onzon said.
He added that short selling has not taken off because of the market鈥檚 current performance.
鈥淚 don鈥檛 expect short selling to take off in a big way right away because the market is down. Brokers have also to adopt their back office. That鈥檚 all happening now,鈥 Mr. Monzon said.
鈥淗opefully, when the market is up, everything is in place,鈥 he added.
On Thursday, the 30-member Philippine Stock Exchange Index (PSEi) rose by 0.29% or 20.12 points to 6,850.16, while the broader all shares climbed by 0.2% or 7.45 points to 3,574.21.
The market had a shortened trading week due to the Chinese New Year holiday.
Compared to the previous week, the PSEi rose by 2.13%, or 142.91 points, from the close of 6,707.25 on Feb. 2.
Short selling is a 鈥渢rading strategy that involves the selling of a borrowed security with the intention of buying it back later at a lower price,鈥 which allows investors to hedge against the downside risk of an investment.
Eligible鈥俿ecurities for聽short聽selling聽include all聽PSE聽index,聽PSE聽MidCap, and聽PSE聽Dividend Yield constituent companies and exchange traded funds.
