PSE’s retail investor base to hit 1M by 2017


Source: BusinessWorld | by Daphne J. Magturo | May 10, 2015

AT LEAST three million Filipinos have the financial muscle to join the stock market, and the Philippine Stock Exchange (PSE) is targeting to corner a third of that by 2017 by penetrating the Visayas and Mindanao regions, PSE officials said.
“There are about 600,000 investor accounts now, and a realistic goal for the next few years would be to bring that number up to a million,” PSE Chairman Jose T. Pardo told BusinessWorld in a mobile phone reply on Saturday.

“Our estimates show that there are at least about 3 million Filipinos with enough savings to invest in the stock market.”

Latest data available from the PSE showed the total number of online and broker-facilitated accounts climbed 11.4% to 585,562 in 2013 from 525,850 in the prior year.

The growth in investor accounts was supported by the expansion in online accounts, which went up at a record pace of 65.3% to 129,255 in 2013.

Online investors will drive growth in the retail base to one million by end-2017, according to PSE Chief Operating Officer Roel A. Refran.

“It’s a modest target. Looking at the year-on-year growth of retail investors, it is very likely that by end of 2017, we are already at those levels,” John G. Garcia, assistant head of the PSE Marketing Services Department-Capital Markets Development Division, said in a separate interview.

In September 2011, the local bourse launched its first regional office in Cebu City to facilitate capital market activities in the Visayas. It then conducted the first Philippine Capital Markets Investment Conference in the city in 2014, and a second one in Iloilo City this year, along with market education seminars in the provinces of Batangas, Cagayan de Oro, Davao, and Pampanga.

To draw Muslim investors, the PSE released in December 2013 a list of companies that are found compliant with Shariah, the Islamic law based on the Quran and the teachings and practices of the Prophet Muhammad.

The list, which is composed of 60 securities as of end-March, is updated quarterly through the standards of the Accounting and Auditing Organization for Islamic Finance Institutions. It can be used as basis for future financial products, including a Shariah mutual fund and exchange-traded fund, PSE President Hans B. Sicat had said.

In Oxford Business Group’s 2015 report on the Philippines released last week, Mr. Pardo noted a trend of “decentralization,” where growth in capital market investments is slowly becoming not anymore concentrated within urban centers.

“However, as we see expansion in provincial centers, we respond to market realities and seek out areas where we can potentially sustain our presence,” the PSE chairman said in the report.

Mr. Pardo cited the PSE’s efforts to encourage capital market players to introduce new products that will “ensure the safety of investments.”

These include principal type of mutual funds, which will preserve the investors’ principal even if a stock price drops.

“The goal is to attract new investors and protect them, especially those who are salaried workers, have modest investable funds and have a more conservative risk appetite.” — with Krista Angela M. Montealegre