Manila exchange glitches puzzle brokers

By Roel Landingin in Manila

Published: September 1 2010 17:02 | Last updated: September 1 2010 17:02

The Philippine Stock Exchange describes it as “birth pains”. But market participants in Manila have been scratching their heads after the exchange’s new trading and market data system reported an erroneous 15 per cent jump in the PSE main index – instead of the correct 0.63 per cent when the system was rolled out on July 26.

It promptly issued advisories for investors to ignore the index numbers on its website.

In the past week, the exchange has again issued similar advisories on two occasions: on August 27 and 31. In a statement released on Tuesday the PSE said it had moved the location of its back-office servers over the weekend. “The server shift has affected the accessibility of index statistics on the website,” it said, without elaborating. The PSE has not responded to emails requesting clarity and more details.

Exchange officials insist the glitches are minor and have not affected trading at all. Some brokers beg to disagree. “We are experiencing more downtimes now. We’ve had three last week,” said Joey Roxas, a long-time Manila stock broker. He also complained that the stock exchange’s website has been going down more often of late, interrupting public access to potentially market-moving disclosures by listed firms.

It is not clear if the disruptions are all due to the adoption of new trading system, which the PSE has acquired from NYSE Technologies. But they are adding to brokers’ concerns about replacing the old trading system that has been in use for 15 years.

Mr Roxas said many brokers complain that the new system’s menu for entering orders occupies a smaller window on the computer monitor and requires more keystrokes.

He added that many are grumbling that their concerns are not being addressed by an exchange board whose members are mostly no longer stockbrokers.

Still, the technical disruptions have not stopped the local stock market from soaring on the back of strong corporate profits and faster economic growth. Weeks after the shift to the new trading, the PSE index rose to a 31-month high on August 20 when it closed at 3,593.60 points. It ended at 3,593.41 points on Wednesday.

The PSE’s programmers and engineers are hard at work to fix the computer glitches. Exchange officials will need to work harder to repair ties with the stock brokers.

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Sep 2, 2010