More Filipinos drawn to stock market

More and more Filipinos are starting to participate in the stock market as the local index continues to outperform most of its counterparts in the Southeast Asian region, the Philippine Stock Exchange (PSE) said.

There are now 505,054 retail investor accounts in the country, based on reports from brokers, the PSE said yesterday said in a statement. The figure was up just 1.3 percent from last year’s 498,838, but breached the crucial 500,000 mark for the first time.

Also noteworthy was that individuals earning less than P500,000 a year now make up the bulk of investors, replacing those with annual income of P1 million.

“While the growth in the number of accounts was tempered in 2011, we are pleased with the significant increase in the number of active accounts in the market,” PSE president and CEO Hans Sicat said.

“This reflects robust trading activity the past year, which was sustained this year with the 40-percent increase in value turnover year-to-date compared with last year.”

Institutional accounts in 2011 grew by 1,856 accounts, or 7.5 percent, to 26,692 from 24,836 in 2010. Active institutional accounts, likewise, registered a 16.3-percent expansion to 8,302 from 7,136 in 2010.

Local accounts continued to dominate the bourse with a 98.6-percent share. The remaining 1.4 percent belonged to foreign accounts.

“It is noteworthy that local accounts continue to provide a healthy base for our stock market as seen in the growth of active local accounts,” Sicat said.

“As we continue to welcome more foreign investments in the stock market, the share of local trading is necessary in building a strong base for liquidity in the stock market. We continue to persist in our market education initiatives to reach a broader retail base.”

The profile of local investors shows that stock trading is slowly becoming more accessible to people with lower incomes.

Individuals earning less than P500,000 annually accounted for the biggest share at 37.4 percent of retail investors. Meanwhile, investors who earn more than P1 million a year covered more than a third of retail investors. The remaining 28.1 percent earn between P500,000 to P1 million a year.

Most local retail investors are based in Metro Manila, accounting for 76.8 percent of the total while 13 percent of retail investors are based in Luzon (excluding Metro Manila).  Local retail investors from the Visayas and Mindanao represent 6.1 percent and 2.3 percent of total retail accounts, respectively. Overseas local investors comprised a collective 1.9 percent of local retail accounts.

“We are cognizant of the challenges that continue to face the PSE in broadening its investor base. On this score, we have pushed for the expansion of our presence in the Visayas and Mindanao with the establishment of a PSE satellite office in Cebu last year, and hopefully another one in Cagayan de Oro to be opened later this year,” Sicat said.