The launch of the short selling program at the local bourse has been deferred for two weeks to give market participants more time to prepare and comply with securities borrowing and lending and short selling requirements.
So instead of on Monday, October 23, the formal launch is reset to November 6, the Philippine Stock Exchange said.
“The implementation of short selling is an important milestone for the Philippine stock market. The ability to take short positions will provide investors a tool to hedge their investments, which hopefully will help attract foreign investors back to our market. Short selling is also an essential component to our securities borrowing and lending program and should generate increased trading activity as more shares are made available through lending”, PSE president and CEO Ramon S. Monzon said.
Short selling is essentially selling a stock one does not own. It cannot happen unless securities borrowing and lending rules are in place. It happens as the price of the stock drops, sell it and profit from the difference.
According to the PSE, 53 securities are initially eligible for short selling. These are constituent securities of the PSEi, the midcap and dividend yield indices, as well as an exchange traded fund.
The list of eligible securities will be updated when there are changes in its composition.
Earlier this month, the bourse announced the effectivity of PSE guidelines for short selling transactions.
