Although companies going public in the Philippine are required to reserve 10 percent of their offering to small investors, the historical takeup 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 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 IPO. 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 takeup by LSIs of IPO shares might 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 themselves of IPO shares had to go to designated IPO kiosks in select Metro Manila malls to secure and fill out a subscription form, bring the 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 an LSI who could only invest then a maximum of P25,000 per IPO,” PSE president and chief executive 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 IPOs 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 on the PSE EASy website, which can be accessed through https://easy.pse.com.ph.
To successfully complete the registration, the account must be confirmed by the stockbrokerage 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 ongoing 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.