PSE body pushes for present trading sked

The floor trading and arbitration committee (FTAC) of the Philippine Stock Exchange has recommended the retention of the current afternoon trading schedule to PSE’s board of directors after the results of a recent survey showed this was the preference of the majority of the brokers.

The six-member FTAC said they discussed the survey results last April 18 in relation to the proposal to further extend the afternoon trading hours to 4 p.m. and arrived at the conclusion that "there is no empirical basis to support the proposition that the further extension of the afternoon trading hours will bring in more trading volume, at least not in the foreseeable future."

The FTAC is chaired by Eddie Gobing and includes as members fellow brokers Irving Ackerman, Nestor Aguila, Alejandro Yu, Johnny Yap and Elphege Wong.

Results indicate that out of 116 brokers surveyed, more than half (51 percent) or 59 brokers favored the retention of the 1 p.m. to 2:30 p.m. schedule; following behind were 25 brokers (21.5 percent) who voted for the re-scheduling from 2 p.m.; another 22 brokers (19 percent) wanted the hours slightly moved from 1:30 p.m. to 3:00 p.m.; while 10 others (8.5 percent) did not indicate any preference.

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 January 2002 to mid-February 2002."

It pointed out that since the start of extended trading, a 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.

On the suggestion to give the brokers the option to decide whether or not to operate in the afternoon, the report said it was the consensus of the committee members that the PSE, being a financial institution serving the interest of the investing public, must apply the rule uniformly and not give any broker the discretion to trade in the afternoon.

"It is the view of the committee that the attractiveness of our market to foreign investors does not really depend on longer trading hours but on the number of quality stocks it can offer and the stability of the political and economic environment," the FTAC report said.

However, the FTAC report said it is not closing the door to further extension of the afternoon trading hours "in the event that the market makes a sharp turnaround from its present sluggish condition and warrants such a move."