Stock exchange notes more investors even amid crisis

MORE Filipino and foreign investors participated in the local bourse last year amid the financial crisis that clobbered global stock markets, the Philippine Stock Exchange (PSE) said in a statement yesterday.

Higher investor awareness and participation is expected this year given reforms in the equity market, PSE officials said.

“Local investor accounts increased by 6.7% to 469,467 accounts in 2009 from 440,104 accounts a year ago,” the PSE said.

Last year, local investors accounted for 98.6% of the total registered investor accounts, with foreigners taking up the balance.

In a study, the PSE surveyed 132 active trading participants last December.

“Total investor accounts rose by 7.1% to 476,194…from the previous year’s total of 444,680,” the PSE said.

Of the total local accounts, 443,780 were retail and 25,687 were institutional.

Online accounts also ballooned by 46.8% to 28,261. Most were active traders.

“This is a reflection that the PSE’s efforts on market education are bearing fruit. The stock market is slowly being noticed as a viable investment medium despite the economic crisis,” Val Antonio B. Suarez, chief operating officer and senior vice-president of the PSE, said in the same statement.

Still, only 0.49% of the country’s estimated population of 90 million was engaged in the local bourse, the PSE said.

Furthermore, foreign investor accounts jumped by 47% last year to 6,727, from 4,576 in 2008.

The study showed that foreign investors’ accounts, particularly those that were traded at least once during the year, were more active than those of local investors.

“Foreign active accounts grew by 77.4% to 2,545 in 2009 from 1,435 in 2008… Meanwhile, local active accounts grew by 9.5% to 105,765 from 96,604 in the previous year,” the PSE said.

“One of the biggest challenges for the PSE with regard to enticing investor interest remains the limited liquidity of issues. To address this, the PSE has reinstated the rule requiring listed and listing applicant firms to meet a minimum 10% public float to maintain their listing status with the PSE,” the statement quoted PSE Chairman Hans B. Sicat as saying.

The PSE said “reforms” like integrating capital market topics in high school and college are under way. The scheme will “form a base of future investors or at the very least, individuals educated about the capital markets,” Mr. Suarez explained.

Also in the study, the PSE said 56.4% of the local bourse’s participants were made up of male investors, corresponding to 69,589 accounts, compared with 43.57% for women.

In terms of annual income, individuals earning between P500,000-P1 million annually accounted for 41% of retail investors, while one-third earned less than P500,000 a year.

In terms of age, 40.9% of retail investors came from the 45-59 bracket. The bulk of retail investors were professionals.

Furthermore, most local retail investors, or 86.5%, were based in Metro Manila.

“The stock market is beginning to attract a diverse group of investors from all income levels,” Mr. Suarez said.

The PSE operates the only stock exchange in the Philippines, with 250 listed companies and 132 active trading participants. — Neil Jerome C. Morales, BUsinessworld