close
Breaking news

A new line of argument has already come to dominate the public sphere: it’...read more The government has gone one step further to detect community spread of the coro...read more The government has issued an order to abolish the six allowances, including the...read more Aarogya Setu application launched by NIC is aimed to track COVID-19 affected pe...read more SEOUL| South Korea’s unemployment rate was unchanged in April as the coronavi...read more Amid the outbreak of Corona pandemic in the country, Indian government has been...read more Prime Minister Narendra Modi in his address to the nation on Tuesday indicated ...read more Corona infection in the country is taking a macabre form. So far, more than 74 ...read more Congress General Secretary Priyanka Gandhi Vadra has written a letter to UP Chi...read more On Tuesday, Prime Minister Narendra Modi announced a package of Rs 20 lakh cror...read more

Philippines becomes first country to shut-down stock exchange. Others to follow?

One thing is quite clear that if equity markets keep falling in the manner it has been falling for the past 20 days, more drastic actions may be in the offering from the governments world over.

MANILA/SINGAPORE: The Philippines Stock Exchange becomes the first in the world to shut down all trading operations from Tuesday for an indefinite period of time while currency and bond trading were also suspended.

The move comes after the world over, stock markets witnessed falls of epic proportions never seen before in this millennium. In the past, one-week downward circuit breakers were triggered in all major markets including that of India causing trading to come to a brief halt.

While the official reason for the Philippines’ shutdown is health and safety concerns, but given the unprecedented slump in equity markets, suggestions have poured in to close down all major trading exchanges.

Even in India, there were rumours that the NSE may be considering banning short selling in its exchange for which the Directors of NSE had to come out and clarify that there has been no such consideration given on banning short selling for now.

Already, nearly all major Central Banks have initiated massive liquidity injection programmes to stabilize the markets. US Federal Reserve has brought the benchmark rate to near zero and promised to pump US $700 billion worth of money into the financial system. Almost simultaneously, RBI announced $2 billion worth of dollar swap and assured to pump in as much as ₹ 1 lakh crore into the Indian financial system through long-term repo operations. But, all such money printing measures seem to have little effect on the coronavirus-induced global stock market crash.

But one thing is quite clear if equity markets keep falling in the manner it has been falling for the past 20 days, more drastic actions may be in the offering from the governments world over.

However, many don’t believe shutting down of stock exchange is the appropriate action to stem the slide of equity prices. Many say it could worsen the prospect of any future recovery after trading resumes and will also hurt the government’s ability to raise funds in the bond market.

The Philippines benchmark was down 8% on Monday and is down 20% for the month of March, already the worst year since October 2008.

 

 

Tags: , , , , , ,

Story Page