PSE to launch short selling program on Nov. 6

Local bourse operator Philippine Stock Exchange Inc. (PSE) announced on Friday that it would launch its short selling program early next month.

The PSE’s short selling, an investment strategy that allows a trader to earn by anticipating stock prices to fall, will go live on November 6.

The local bourse operator said the launch date was moved from its original “go live” schedule on October 23 “to give market participants more time to prepare and comply with securities borrowing and lending (SBL) and short selling requirements.”

In short selling, a trader borrows shares from a broker and then immediately sells them, expecting that price to fall shortly.

“The implementation of short selling is an important milestone for the Philippine stock market. The ability to take short positions will provide investors with a tool to hedge their investments, which hopefully will help attract foreign investors back to our market,” said PSE president and CEO Ramon Monzon.

“Short selling is also an essential component of our securities borrowing and lending program and should generate increased trading activity as more shares are made available through lending,” he added.

The PSA said a total of 53 securities will initially be eligible for short selling. 

The stock market operator said the securities are the constituents 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 the composition of the said indices, it said.

On October 2, the PSE announced the effectivity of its Guidelines for Short Selling Transactions. —VBL, GMA Integrated News