Online accounts seen lifting stock market participation

ONLINE INVESTORS continue to lift participation in the local bourse in 2019, and more of these are expected to come on board this year, the Philippine Stock Exchange, Inc. (PSE) said.

In its Stock Market Investor Profile report released Wednesday, the bourse operator said the total number of stock market accounts grew 12.7% to 1.23 million last year, which it attributed to the rise in online accounts.

Online accounts expanded by 25% to 782,118, making up 63.7% of total stock market investors. The remaining 36.3% are accounts by traditional stock brokerage firms.

“Online accounts have been the reason for the steady rise in total stock market accounts in the last 10 years,” PSE President and CEO Ramon S. Monzon said in a statement.

“The shift in trading format preference of investors have encouraged stockbrokerage companies that cater to retail investors to start offering online trading services to their clients,” he added.

This trend is expected to benefit the market this year, as Mr. Monzon said investors are afforded an easier process to participate in the market during the lockdown. Online stock brokerage firms are now validating client applications through videoconferencing.

“[W]e expect the online investor population to increase in 2020 mainly due to investors opening online accounts during the community quarantine period and as investors participate in initial public offerings through PSE Electronic Allocation System,” he said.

These benefits, along with the decline in market prices due to the coronavirus disease 2019 (COVID-19) pandemic, are expected to help drive increased participation in the bourse, including from those in areas outside Metro Manila.

“With the stock market still trading way below pre-COVID levels, we may see new investors who are looking for good buying opportunities open trading accounts. This may also help prop up our investor count for the year,” Mr. Monzon said.

The PSE index closed at 6,016.51 on Wednesday, down 156.30 points or 2.53% from the day prior. Its 52-week high is 8,311.92.

Based on the report, local participants made up 98.4% or 1.21 million of the 1.23 million stock market accounts last year, while 1.6% or 19,558 were foreign accounts.

Most of the accounts were retail investors, which took up 97.7% of the pie, while 2.3% were institutional accounts.

In terms of age group, most investors belonged to ages 30 to 44, accounting for 45.5% of the total. Those aged 18 to 20 made up 21.7%, those aged 45 to 59 accounted for 20.3%, and those aged 60 and above made up 12.5%.

Most of the investors are employed locally, making up 80.1% of the total. The rest are either self-employed (7.7%), retired (5.3%), unemployed (4.8%), studying (1.2%) or working abroad (1%).

About 75.7% of investors are living in Metro Manila, 13.9% are from other areas in Luzon, 5.3% are from Visayas, 3.3% are from Mindanao and 1.8% are from overseas locations.

In terms of foreign nationals, the top investors in the local bourse are Chinese (20.7%), Americans (13.8%), Japanese (12.2%) and those from ASEAN member countries (11.8%). — Denise A. Valdez