PSE lowers stock price floor to 30% amid pandemic

The Philippine Stock Exchange (PSE) is adjusting its trading rules to reduce market volatility amid the coronavirus pandemic.

Starting Tuesday, March 24, the static threshold for individual stock prices will be lowered from 50% below the reference price to 30%, while the upper limit remains at 50%. The PSE president Ramon Monzon said this change aims to address uncertainties caused by COVID-19 and was approved by the Securities and Exchange Commission (SEC).

This adjustment follows a significant drop in the bellwether index PSEi, which reached an eight-year low last week due to fears over the economic impact of the pandemic.

The trading system has been configured by the PSE to recognize a 30 percent decline in share price as the floor price of a security.

Research analysts and traders have welcomed this move, expecting it to ease market volatility and protect investors from excessive sell-offs.