PH shares, peso recover quickly
Despite a five-hour technical glitch
Despite a technical glitch that knocked down trading for nearly five hours, Philippine shares recovered yesterday as quick as it fell the previous day as investors rushed back to the market and took advantage of the global recovery that came after Monday’s crash.
The Philippine Stock Exchange index (PSEi) went up by 39.33 points, or 0.58 percent to 6,830.34, while wider all shares gained 14.62 points, or 0.38 percent to 3,896.32.
Investors, however, got infuriated because of a technical glitch that has knocked down the trading for nearly five hours. Trading was halted from 10:02 a.m. until 2:55 p.m., the longest trading halt in PSEi history. Still, local shares managed to end higher as it mirrored the recovery felt in other global markets.
Regina Capital Development Corp. managing director Luis Limlingan said if the trading halt didn’t happen, the market “might have closed higher.”
PSE president and Chief Executive Officer Hans Sicat apologized for the glitch during an interview with reporters on the sidelines of Maybank Invest ASEAN forum held in Makati.
“We halted trading and the first thing to say is we do sincerely apologize to all our stakeholders. These are investors. These are broker dealers. These are issuers as well as those who are interested in the Philippine markets,” Sicat added.
“We know it is an inconvenience but we also thought that it’s the right thing to do for the following reasons… The basic issue is not the core trading engine itself. The core trading engine is fine. The issue is what you might call the middle ware. It’s essentially the software that sends information from the base trading engine to your front-end terminals,” Sicat said.
He explained that some of the actual data started reaching the front-end terminals slower than the others and that shouldn’t be the case.
“Our job is to ensure that there’s fairness in the market so clearly, this would not create a fair situation so what we have done is basically shut it down,” Sicat said.
Despite the halt, the PSE decided not to extend the trading to “minimize further technology risk.”
“But we have isolated
the problem. We will hopefully resolve any other issues so we wouldn’t have the same situation moving forward… Given that it is technology that we are dealing with now, I think we have the best minds to deal with it, both our team as well as our technology providers. We hope it won’t happen again. But we have to be mindful too,” Sicat further said.
Before the halt, the benchmark index was already recuperating from the nearly 500-points slump that it experienced on Monday as global markets also started rebounding.
“People are very annoyed [about the trading halt]. It caused a lot of disruptions. It’s a business and that’s the only way that traders can earn. And even then, they [PSE] didn’t tell us immediately what’s causing the glitch. It caused inconvenience,” Limlingan told Business Bulletin.
“Given that it’s the new system that we are using, we have been using it for about three months now. That’s really embarrassing,” he added.
This is the third time for this month alone that the trading was halted. The last time was on Monday when the market was currently on a slide due to global woes mainly brought about by China economic slowdown.
On Monday, Philippine shares caught itself under pressure together along with other global markets as fears over China’s economic slowdown ballooned, shedding its biggest one-day trading loss in history.
During the first trading day of the week, the PSEi erased its entire 2015 gains, showing its biggest single-day loss in the bourse’s merged history.
PSEi particularly sank 487.97 points on Monday, or 6.70 percent to close at 6,791.01, while the wider all shares lost 276.42 points, or 6.65 percent to 3,881.70. Before the market closed for the long weekend, the PSEi was still at 7,278.98.
As early as the afternoon recess, PSEi already dove 6.38 percent or 464.38 points to close at 6,814.60. Percentagewise, Limlingan said this is the benchmark index’s sharpest fall since 2011.