THE Philippine Stock Exchange, Inc. (PSE) will be implementing a new dynamic threshold for securities next month after conducting its semi-annual review in July to December 2019.

In a Jan. 10 memorandum posted on its website, the local bourse operator announced changes in the dynamic threshold of listed securities. The changes are set to take effect by Feb. 3, Monday.

The PSE defines the dynamic threshold as the “maximum allowable price difference between an update in the Last Traded Price (LTP) of a given stock or group of stocks and its preceding LTP that is equal to a percentage set by the PSE.” It is a measure to protect investors from unusual fluctuations in share prices.

In accordance with the guidelines on revised trading rules that took effect in 2010, the PSE has set dynamic thresholds based on three security clusters: A, or for securities traded 20 times or less in the past six months; B, or those traded 500 times or less but greater than 20 times in the past six months; and C, or those traded more than 500 times in the past six months.

As set by the guidelines, the dynamic threshold for security cluster A is 20%, for security cluster B is 15% and for security cluster C is 10%.

The new memorandum of the PSE adjusted the number of securities classified in every cluster.

For group A, the list grew to 35 securities from 34 in the current matrix. This took into account the inclusion of shares of newly-listed firm Fruitas Holdings, Inc.; the class “B” series 2 preferred shares of Ayala Corp.; and the non-noting perpetual preferred shares series 4 of Phoenix Petroleum Philippines, Inc.

Securities under group B also expanded, growing to 66 securities from 61 at present. Apart from the movement of some securities from one cluster to another, the list also added shares of Benguet Corp.

For group C, however, the list declined to 225 securities from 228 at the moment. This covers the inclusion of shares in newly listed firms Axelum Resources Corp. and AllHome Corp.; the removal of shares in Travellers International Hotel Group, Inc.; and the movement of some shares to other clusters.

The guidelines on the dynamic threshold for securities say new securities listed on the PSE are subject to the 20% dynamic threshold by default.

The review of dynamic thresholds happens every second trading week of January and July, but the guidelines allow the PSE to reclassify a security even before the six-month review period ends if it finds that the trading frequency of such security needs attention. — Denise A. Valdez

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