PSE says GCash partnership to add millions of new stock market investors

The Philippine Stock Exchange could see the biggest influx of new investors in the coming years after announcing a partnership with GCash, the mobile wallet backed by the Ayala Group and Chinese billionaire Jack Ma.

PSE president and CEO Ramon Monzon said in a television interview the bourse signed a tripartite agreement last Friday with GCash and stockbrokerage house AB Capital Securities Inc.

This would allow GCash’s 67 million users to directly invest in the stock market beginning November this year, he added.

Monzon said projections from GCash showed they could add nine million new investors to the stock market in five years from about 1.7 million participants today.

“It’s really going to be a game-changer in terms of the number of retail investors that will participate in the market,” Monzon told One News.

“The Philippine Stock Exchange was organized in 1927. So, you’re talking about 95 years and we only have 1.7 million stock market investors,” he added.

The surge would push market participation above the longstanding cap of 1 percent of the population.

Veteran stock broker Joseph Roxas, president of Eagle Equities Inc., is skeptical of the lofty target.

“The problem is the disposable income of Filipinos. You need extra money to invest in the stock market,” he told the Inquirer.

Board lots, or the minimum number of shares that can be bought or sold, also act as a barrier in some cases.

Roxas said education was critical given the goal to lure millions of new and inexperienced investors.

Monzon said they were planning to widen access by eventually introducing fractional trading in shares “so that more GCash subscribers are able to invest.”

Fractional trading allows an investor to buy and own just part of a share instead of a whole share. This gives them the opportunity to invest in certain companies with relatively more expensive share prices.

The PSE is hoping to tap a new wave of investors given emerging trends in online trading.

Last June, it said online stock market accounts breached one million in 2021, accounting for more than 70 percent of all market participants.

When the annual survey was started in 2008, online accounts accounted for just 4.3 percent of the total.

Moreover, the biggest share of investors came from investors aged 18 to 29 years old, displacing the previous frontrunners in the 30 to 44 years old category.

“Specific to online accounts, the percent share of those aged 18 to 29 years old is higher at 41.2 percent of total online retail accounts from 26.8 percent in the previous year,” the PSE added.