A visit to the Philippine Stock Exchange
March 28, 2008
Our “Investment Management” class in UP Diliman went to the Tektite Tower last week just before the Holy Week holiday to have a tour of the Philippine Stock Exchange (PSE).
It surely was exciting to actually visit one of the country’s stock trading floors but, at the same time, disappointing because we did not see a lot of “action.”
Remember pictures or movie scenes of stock traders where they shout and haggle their orders passionately on the floor? Well, there was nothing like that during our tour. In fact, at one point, we saw a few people taking a nap on their desks and also a group of traders chit-chatting — all during trading hours!
Our gracious guide, Ms. Katie Buenaobra, explained that most trades are now conducted online, which means traders don’t anymore have to shout orders on the floor. Traders merely input an order on their terminals and then just wait for it to be processed.
We also asked why there seemed to be a lot of unoccupied brokers’ tables on the floor. Apparently, those used to be either for trading companies that already closed down or for companies who have their own terminals in the office, which means they don’t have to be in the PSE trading floor anymore.
Our guide also walked us through the history of the Philippine Stock Exchange. Did you know that the PSE was actually a result of the merger of the Manila Stock Exchange and the Makati Stock Exchange back in the ’90s?
The Tektite office houses what used to be the Manila Stock Exchange and Tower One in Ayala houses the Makati Stock Exchange. The Makati trading floor is much bigger and has twice more licensed brokers than the Tektite floor.
Which trading venue do presidents like Gloria Macapagal-Arroyo visit to ring the bell to signal the start of trading? The answer: the Makati exchange, because it has stricter security than the one in Tektite.
We also got to learn more about stock trading rules and conventions in the Philippines. Are you aware that publicly-listed companies are required to disclose to the PSE any material event or issue within 10 minutes of occurrence? If, for instance, the CEO of your listed firm dies, you call the PSE first before the spouse! Otherwise, the company will be fined or might even be delisted.
All in all, the PSE tour was good because we got to see things we only discuss in class. But the best part for me was to actually see the price of one of my stocks increase by 7% right there on the board at the center of the trading floor! That alone was definitely rewarding.
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