MANILA -- The Philippine Stock Exchange (PSE) is launching its short selling program on November 6.

The bourse said they moved the launching from its original October 23 date to give participants more time to comply with securities borrowing and lending and short selling requirements.

In short selling, a trader borrows shares whose price he thinks will decline and then sells them in the open market. Once the shares' price falls, he buys them back at the lower price and returns them, making a profit via the difference in the stock's old and new price.

However, if the stock's price rises, the trader loses money as he has to buy these back at the new higher price before returning them.

PSE President Ramon Monzon said they hope short-selling will help woo foreign investors back to the Philippine market.

"The ability to take short positions will provide investors a tool to hedge their investments, which hopefully will help attract foreign investors back to our market," he said.

"Short selling is also an essential component to our securities borrowing and lending program and should generate increased trading activity as more shares are made available through lending,” he added.

The PSE said 53 securities--members of PSEi, the MidCap and Dividend Yield indices, and an exchange-traded fund--will initially be eligible for short selling.

The list of eligible securities will be updated when there are changes in the composition of the said indices, the PSE said.

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