Abacus unveils online stock trading platform

Abacus Securities’ new trading platform

Abacus Securities Corp., one of the country’s biggest local stock brokerage houses, is debuting into the online trading business with the goal of scaling up to be among the market leaders in this space.

In a press briefing on Thursday, Abacus vice president for research Raymond Neil Franco said with the rollout of new online trading platform mytrade.com.ph, the aspiration would be to emerge as a “strong number two” player in this online space within a year or two.

Within the next six months, Abacus also plans to distribute mutual funds using this online platform, similar to the online mutual fund supermarket offered by the likes of COL Financial and First Metro Securities.

“We do plan to partner with mutual fund companies to offer their products to clients, because in our traditional business, we also have a lot of institutional clients,” Franco said.

Around 60 percent of Abacus’ existing business consists of institutional sales. However, the launch of the online trading platform seeks to broaden its market base, especially among retail investors.

Abacus Securities vice president, compliance officer and chief of staff Sheila Marie Aguilar and vice president for research Raymond Neil Franco talk about MyTrade

Instead of developing a proprietary trading platform or hooking into the system offered by the Philippine Stock Exchange, Abacus tapped a third-party technology provider, Kuala Lumpur-based N2N Connect, which services the leading stock brokerage houses and investment banks in Malaysia.

“We went around looking for the best platform and the best corporate fit. We looked at several providers locally and also looked at building our own,” Franco said. Upon seeing N2N’s platform, Franco said his group was “overwhelmed” and found a natural fit, given that such system was “way ahead of what the competition offers.”

As Abacus took quite a bit of time to enter the online trading space, Franco said the brokerage house would like to do this correctly.

The new platform mytrade.com.ph pitches improved reliability, faster processing, ability to input orders outside of regular trading hours and capability to customize to the client’s needs.

“We’re promising much less downtime compared to competitors or hopefully we won’t have any downtime at all,” he said.

Minimum investment to open an account at mytrade.com.ph is P10,000.

To date, traditional portfolio accounts at Abacus average P50 million and reach as high as P1 billion. The brokerage house has around 20,000 traditional clients, of which 3,000 are active traders.

In the local stock market, there are 30 online trading providers, with the market leader COL Financial having a customer base of over 200,000 as of end-2016. Overall, Franco said the market was fragmented, consisting of a number of players servicing a total of around 300,000 online accounts.

“Our near term target is to get a 10 percent market share,” Franco said.

“There’s very little loyalty when it comes to online trading because people trade for themselves,” Franco said, believing that given ample choices in the market, investors would go to the brokerage house that offers the best technology.

Sheila Marie Aguilar, Abacus vice president, chief of staff and compliance officer, said this brokerage house had built its research capability to offer “concise, relevant and ahead of the curve” information for investors.

Apart from Franco, Abacus has a team of six fundamental analysts and one technical analyst. Two of Abacus’ analysts have a Masters degree in Economics, one passed level three of Chartered Financial Analyst (CFA) certification and another passed level 2 of CFA certification.

Founded by businessman Paulino Soo 25 years ago, Abacus now ranks among the top 20 stock brokerage houses in the PSE, which has 132 trading participants. Excluding foreign brokerage houses, it ranks within the top five among local trading participants.