Trading glitch unlikely to shake index — analyst
By Marielle C. Lucenio
TRADING suspension at the Philippine Stock Exchange (PSE) due to a technical glitch on Tuesday was unlikely to shake the index, analysts said, noting that negative investor sentiment about the matter was irrational.
“We can’t say for sure how this difficulty will unfold, but any negative sentiment is irrational assuming it is just a glitch,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message. “I don’t see any of the index companies’ income being tied to the PSE glitches.”
The bourse canceled trading after 43 of its 125 brokers failed to connect to its system. Under the rules, trading must be halted if at least a third of its brokers are unable to connect.
“If some big irrational investor sells because of the glitch, I think it’s a buying opportunity,” Mr. Limlingan said. He added that the glitch was unlikely to continue in the next trading days.
Indexes might get shaken due to worried local investors who might stay on the sidelines, said Darren Blaine T. Pangan, a trader at Timson Securities, Inc.
Foreign investors might avoid the PSE and instead put their money in other foreign markets with fewer issues if the glitch is not solved immediately, he added.
“The Philippine Stock Exchange index might have a noticeable decline in performance if it becomes persistent, since confidence in the system might be tarnished,” Mr. Pangan said, adding that it was too early to say whether it would badly affect the index.
Shares would probably fall on Wednesday as traders price in their worries about some provinces near the capital region being placed under a stricter lockdown amid rising coronavirus infections, said Japhet Louie O. Tantiangco, a senior research supervisor at Philstocks Financial, Inc.
The government on Tuesday raised the virus alert in Bulacan, Cavite and Rizal provinces to Level 3 amid the threat of the highly mutated Omicron coronavirus variant.
PSE President Ramon S. Monzon said in a statement on Tuesday the bourse manager was working closely with NASDAQ and Flextrade representatives to identify the root cause of the issue. The problem would be solved soon, he said.
The 30-member PSEi dropped by 81.36 points or 1.14% to 7,041.27 on Monday, its worst start to a year since 2016 as Manila, the capital and nearby cities returned to a stricter lockdown to contain a fresh surge in coronavirus infections. The broader all-shares index lost 40.22 points or 1.05% to 3,777.90.
