PSE To Launch Short Selling Program On Nov. 6

The Philippine Stock Exchange Inc. (PSE) has announced that it will formally launch its short selling program on November 6, following a brief setback from the original launch date of October 23.

Through short selling, investors can sell borrowed securities and buy the eligible 53 securities that constitute the PSE index (PSEi), Midcap, Dividend Yield indices, and other exchange-traded funds. I Photo: The Philippine Stock Exchange, Inc. Facebook

The PSE defines short selling as "any sale of a security that will be settled by the delivery of borrowed securities, which allows the investor to benefit from an expected future decline in price."

Through short selling, investors can sell borrowed securities and buy the eligible 53 securities that constitute the PSE index (PSEi), Midcap, Dividend Yield indices, and other exchange-traded funds.

These will initially be eligible for short selling when the program launches.

PSE President and CEO Ramon S. Monzon considers the implementation of the program an "important milestone for the Philippine stock market." He states that "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."

He also adds that "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."

The initial launch date was moved from October 23 to allow market participants ample time to "prepare and comply with securities borrowing and lending (SBL) and short selling requirements."

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