PSE installs system to weed out price manipulators

The Philippine Stock Exchange (PSE) is banking on its newly-acquired fully automated surveillance system to weed out price manipulators as it seeks to enhance the level of confidence of investors in the stock market.

PSE chairman and retired Supreme Court Justice Jose Vitug said the advanced warning and control system (AWACS), developed by Singapore-based 3i Infotech, is a highly sophisticated monitoring package that keeps track of the securities market and immediately detects unusual trading activities both on real-time and off-line or after market closes.

The PSE acquired the system for $300,000.

3i Infotech’s Nirmal Chandler, for his part, said the AWACS has market replay features which allow a revisit of any day’s trade activity sequentially or every price movement.

The system is the same system being used by the Calcutta Stock Exchange, Bangalore Stock Exchange, Pakistan’s Securities and Exchange Commission as well as the Philippine Securities and Exchange Commission.

Vitug said the system is ready to be installed in the next few weeks.

"This is our signal for potential stock market wrongdoers to stay away from our market and for legitimate investors to entrust more of their funds with us," Vitug said.

"We in the exchange strongly believe that measures such as this will nurture a culture of compliance among our market participants and further strengthen the integrity of the capital market," Vitug said.

Vitug, however, underscored the need for investors to remain cautious and diligent in making investment decisions.

"It always takes two to tango. Even with the AWACS impending launch, investors should continue to do their part in protecting their investments by learning as much as possible stockmarket operations," Vitug said.

Vitug advised investors to rely on listed company fundamentals, instead of relying excessively on market rumors and speculations as he pointed out that speculative plays are meant for savvy investors who are more than willing to take on very high risks in exchange for a specified return.