PSE makes it easier for small investors to buy IPO shares

A trader walks in front of the logo of the Philippine Stock Exchange (File photo by JAY DIRECTO / AFP)

MANILA, Philippines — Although companies that are going public in the Philippine are required to reserve 10 percent of their offering to small investors, their historical take-up does not even breach 2 percent.

The Philippine Stock Exchange Inc. hopes to change this by using technology to make it easier for local small investors (LSIs) to participate in initial public offerings (IPOs).

The PSE announced on Monday, June 3, the rollout of a web-based platform called PSE EASy (Electronic Allocation System) which allows LSIs to subscribe to shares online whenever there is an initial public offering. Investors can participate in the LSI program by subscribing to a minimum board lot and by purchasing IPO shares that will not exceed P100,000.

In the past, the PSE noticed that the dismal take-up by LSIs of IPO shares may be due to the tediousness of the process and the small amount of maximum investment per individual for each IPO.

“Prior to our launch of PSE EASy, LSIs who want to avail of IPO shares had to go to designated IPO kiosks in select Metro Manila malls to secure and fill up a subscription form, bring this form to their broker’s offices for acknowledgment, and then bring the same back again to the kiosk to make the payment — a very cumbersome process for a LSI who could only invest then a maximum of P25,000 per IPO,” PSE president and chief executive officer Ramon S. Monzon said in a press statement on Monday.

“In furtherance of PSE’s financial inclusion initiatives, the first thing we did was to increase the maximum limit to P100,000 per IPO. We then designed an online LSI platform that will make subscribing to IPO’s more accessible (even to investors in the provinces), efficient and convenient,” he added.

Investors who wish to take part in the LSI program of an IPO should create an account here: PSE EASy.

To successfully complete the registration, the account must be confirmed by the stock brokerage firm where the investor has an account. Once the account has been approved, the investor can participate in the LSI program whenever there is an IPO.

The PSE EASy mobile application will also be introduced in the third quarter of 2019. Except for account registration which should be done on the website, all other PSE EASy functions for investors will be available in the mobile app.

Among these functions include the submission of LSI subscription forms, updating of LSI subscription like adding or reducing shares, prompts when there is an upcoming or on-going IPO or when there are other relevant updates.

“We noted that most of our investors now trade online and they are very savvy when it comes to using mobile apps. We want to continue leveraging on technology to make investing in offerings particularly in an IPO readily available to them,” Monzon added.

(Editor: Alexander T. Magno)