PSE to make local bourse more competitive

MANILA, Philippines - The operator of the country’s only stock exchange has set up a three-year plan that outlines strategies to make the Philippine Stock Exchange (PSE) more competitive with its neighbors.

The PSE’s three-year goal, a follow-up to the five-year Level-up agenda that ended last year, also aims to prevent adverse effects of market volatility, its top executive said late last week.

“The PSE is very aggressive in pushing for more products and services as possible. This move forms part of the PSE’s three-year strategy of becoming a world-class exchange by providing the market with this variety,” PSE president and CEO Hans B. Sicat said.

“All the investment options and technology-driven services that we will make available to the investors are geared towards making the Philippine market competitive vis-a-vis other markets in the region,” Sicat said.

The three-year plan, which is on its first year so far, involves the launch of more products and services and the full implementation of several laws that stimulate investments.

In 2008, the PSE launched the Level-up strategy that aimed to list more companies and securities, expand and educate the investor base, value and enforce corporate governance standards, enhance shareholder value, launch new products and services, upgrade market infrastructure and human resources, and partner with government and other stakeholders.

“Level-up had a lot to do with too many goals, too many things. We probably need to simplify so we can focus,” Sicat said.

In three years, the local bourse is targeted to be “more like our regional counterparts in the sense of having a wide range of menu items,” Sicat said.

Sicat said it is also preparing the PSE for the Southeast Asian trading linkage that is seen to speed up the region’s integration by enhancing access and liquidity in capital markets across the region.

The cross-border trading plan involves Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, Singapore Stock Exchange, Stock Exchange of Thailand and the PSE.

Aside from new products, PSE is looking to maximize the current stock borrowing facility by encouraging more lenders.

“The ability to create derivative products will be a result of having enough ability to hedge, wider liquidity and also having the index futures operating,” Sicat said.

Before the year ends, the PSE will launch Philippines-linked derivatives products like futures and options that will be listed in the Singapore Exchange.

PSE will also introduce new investment instrument exchange-traded funds. It recently started offering PSETradex, a web-based trading management system that allows users to trade shares of stocks, monitor the order status, manage their stock portfolio and gather relevant information using their own computers or smartphones.

Reforms should also be backed by legislations that will support and encourage the capital markets, Sicat said.

“We’re talking about what legislation we need to campaign for in 2014 and 2015,” Sicat said.