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BEYOND unifying the two trading sites of the Philippines Stock Exchange (PSE) in the proposed headquarters to be located in Bonifacio Global City in Taguig, the bourse is also exploring the possibility of including the Philippine Dealing and Exchange Corp. (PDEx) in the same site.

In an interview last week, PSE director Ismael G. Cruz said the PSE is currently in talks with PDEx for the latter to join the local bourse in the new site, which may be completed in 2014.

“It makes sense for us to co-locate. We are the only two exchanges in the country—we [PSE] have the equities exchange [while] PDEx has the fixed-income exchange,” said Cruz. “And down the road, we will both have derivatives products.”

The bourse also owns 20 percent of PDEx, added Cruz. PSE president Francis Ed. Lim and chairman Hans Sicat are directors of PDEx.

Earlier, PDEx has also expressed a plan to include trading of ROPs, or Republic of the Philippines Global Bonds, in its platform. At present, only local currency government securities, or Treasury bills and bonds, are being traded at PDEx.

PDEx also provides the platform for peso-dollar trading among members of the Bankers’ Association of the Philippines.

During the same interview, Cruz said the actual groundbreaking for the site may start as early as the first quarter of 2010. At present, the PSE is trading in two separate locations—the Tektite Building in Ortigas and Ayala Tower in Makati City.

Part of the PSE’s plan is to build a 12-story building which, Cruz said, could take three years to complete including the planning phase.

“Most probably we will be [implementing] the project in a joint venture with a major developer. It is very preliminary but some parties have already expressed interest,” added the PSE official.

Cruz, however, declined to provide details on the project, saying these have yet to be finalized.

As to whether the new site will include a trading floor, he stressed that both options are still under consideration.

“If you look at developed exchanges like Shanghai, they built a huge trading floor but nobody is using it,” said Cruz, explaining that as much as 70 percent of the trading there is done online.

By contrast, online transactions account for only 20 percent of the total trading activity in the Philippines, said Cruz.

“But there are those who feel they can do their business better in a physical place. There are deeply rooted reasons for this and there are new trends. Both have to be considered,” said Cruz.

SOURCE: BusinessMirror, written by Miguel Camus