More Filipinos now trade in stocks, study says

MANILA, Philippines - Local retail investors in the Philippine stock market has increased, indicating that more Filipinos have cashed in on the opportunities brought by buying and selling shares of listed companies. Total investor accounts grew 2.1 percent to 444,680 in 2008 from 435,394 a year ago, a recent survey conducted on the exchange’s 132 active trading participants said. Of total investor accounts, retail, or those owned by individuals, grabbed 95.7 percent while institutional accounts or those held by corporations, represented 4.3 percent. The total number of retail accounts represent about 0.47 percent of the country’s population. Local investors cornered 99 percent or 440,104 of total investor accounts, while the remaining 4,576 or one percent were foreign accounts. Trading through the Internet has also increased, the study said. Online trading has risen to a total of 19,246 online accounts or 8.5 percent higher than 2007, data provided by seven brokers on online investor accounts in 2008 said. Of the total 19,246 online accounts, 93 percent are active, much higher than the 18.8 percent ratio of active non-online accounts to total non-online accounts. Retail investors were the key market for online accounts as they accounted for 99.8 percent of the total. Bulk of the total online accounts or 97 percent was local while 2.9 percent were foreign. Online accounts represent only 4.33 percent of total stock market accounts. However, in terms of volume, online trades accounted for a nearly 20 percent of the total trades in the market. “We realize how much of the trading activity online brokerage firms contribute in terms of the number of trades in the stock market. Imagine, the trades of a handful of online brokers comprise one-fifth of the total trades in the market," Francis Lim, Philippine Stock Exchange president and chief executive officer said. The increase in retail trading accounts also “encouraged" the PSE, especially since the hike “took place during a difficult year," Lim said. “Clearly, the message is that there is a lot of work to be done in raising a nationwide awareness that the stock market could be a safe investment alternative," Lim said. That is why the PSE has been pushing for reforms like the Personal Equity Retirement Account (PERA) law, which was enacted on August 22, 2008, and the Real Estate Investment Trust (REIT) bill. Congress has passed these two measures. “These reforms are meant to incentivize retail investors to trade in the stock market. We won’t be content with just a fraction of the Philippine population as our current pool of investors," Lim said. - Cheryl M. Arcibal, GMANews.TV