‘Trading from home’ is the new normal as PSE prepares to close trading floor


BW FILE PHOTO

By Luisa Maria Jacinta C. Joson, Journalist

AS THE Philippine Stock Exchange (PES) is set to permanently close its trading floor on Friday, traders said there will be little impact as many are now used to ‘trading from home’ during the pandemic. of coronavirus.

“The pandemic has demonstrated and proven that the possibility of floorless trading is effective and viable. It was imminent but it wouldn’t have been so fast, the pandemic was a catalyst that accelerated the movement to go floorless,” RS Lim and Company, Inc. candidate and former PSE director Alejandro T. Yu said in a phone interview.

In a June 10 notice, the PSE announced that it would move to floorless trading, citing advances in technology that have made this trading setup “effiefficient and responsive to the needs of the investing public.

The last day of trading on the flor will be June 24 (Friday).

PSE President and CEO Ramon S. Monzon said only a third of brokers had renewed their leases on the trading floor amid the pandemic.

“We had about 85 brokers trading on the floor, but since the pandemic, when lease renewal time came, only 29 have renewed their leases. And out of the 29, every day there are about nine to ten participants using the floor. Obviously that reflects the fact that we don’t need a prosecutor’s office,” Mr Monzon told the ANC.

He pointed out that the Philippines is the only stock market in ASEAN that still operates a trading floor.

“We are able to prove during the pandemic that we can continue fllead-free trade,” he said.

When the coronavirus pandemic hit in 2020, Yu said traders learned to set up shop from home.

“We can work from home, trade anytime. The writing became clearer on the wall than the floor has become redundant. After the surge of Omicron, which led the Ifnal nail in the coffin,” he said, referring to the strict lockdown put in place in January to tackle the spike in coronavirus cases caused by Omicron.

Regina Capital Development Corp. Sales Director Luis A. Limlingan said the move to “floorless trading” will have minimal impact as traders have become accustomed to home trading.

“It was during the pandemic that merchants turned to e-commerce and already got used to this setup,” he added.

Marc Kebinson L. Lood, head of online trading at Timson Securities, Inc., said the pandemic has accelerated the push to digitize all industries, including the capital market.

“The majority of our neighboring markets do not have a mall flfloor and operate entirely digitally. During the confinement, it took only a few days for the PSE to switch to fltrading without interruption, and trading is relatively seamless even when trading floor is unable to function,” Mr. Lood said in a Viber message.

“Investors are always driven by the fundamentals of the company and the market as a whole, and they don’t care about trading flclosing the door.

Cristina S. Ulang, head of research at First Metro Investment Corp., said trading flclosing the floor is a reflection of the increasingly digital world.

“It’s a new emerging ecosystem for capital markets where brick and mortar could become more low-key and moderate. Just look at e-commerce which is now competing with physical purchases,” she said in a Viber message.

The pandemic has also encouraged more retail investors to go public.

Online trading accounts grew by 23.8% to 1.16 million in 2021, according to PES data. These accounted for more than 70% of the total exchange accounts. Online investors also accounted for 74.7% of total transactions in 2021.

“Innovations are the order of the day. It is on the horizon as people gradually change this movement. I think PSE should be a spearhead in this area and develop platforms and applications that will facilitate e-commerce,” Yu said.

For his part, Monzon said the trading floor is likely to be used as office space or as a venue for events.

“I want to assure you that our trading FLoor will stay open because we will continue to have a lot of bell ringing ceremonies,” he said.

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