THE Philippine Stock Exchange (PSE) has lowered the static threshold of individual stock prices, in efforts to address volatility in the local equities market given uncertainties from the coronavirus disease 2019 (COVID-19).
In a statement, the PSE said it secured the approval from the Securities and Exchange Commission (SEC) to lower the static threshold of individual stock prices to 30 percent from 50 percent.
This means that the floor price of individual stocks will be capped at -30 percent from the previous price starting today, Mar. 24.
“We are looking at measures to address the present volatility in the stock market due to uncertainties from COVID-19,” said PSE president and chief executive officer Ramon Monzon.
“One of the measures we decided to adopt is to tighten the trading band for securities,” he elaborated.
The bellwether index PSEi crashed to an eight-year-low last week, as fears over the worldwide economic impact of COVID-19 triggered massive selling of stocks.
The circuit breaker – which halts trading once the index drops by 10 percent or more – was also triggered several times during last week’s trading session.
“We benchmarked the adjusted lower static threshold level with what other exchanges in the region currently implement, which is between 10 and 30 percent,” said Monzon.
“We already configured our trading system to recognize a 30 percent decline in share price as the floor price of a security,” he explained.
Meanwhile, the upper static threshold of securities will remain at 50 percent.(GMA News)
