The investing and trading landscape in the Philippine equities market has changed with the onset of the pandemic. Every month since June 2020, domestic investors have been predominantly responsible for trading volumes at the Philippine Stock Exchange (PSE). Prior to that, foreign investors dominated trades for four straight years.
As of the end of August, foreign investors accounted for only 33.1% of trading turnover, a decline of 30.8% from their volume contribution in the same period a year ago. Notwithstanding the exodus of foreign investors, daily average trading volume at PSE rose from $140.83 million in 2019 to $172.17 million by the end of August, an increase of 22.3%.
Another historic trend has been the change in percentage of trades accounted for by institutional and retail investors at the exchange, with the latter making up 35.2% of trades as of August 31, up from 18.2% at the end 2019. Trades from retail investors peaked in January this year at 50.7%, outpacing their institutional counterparts for the first time in our history.
In the context of the present higher trading volume, this development is indeed noteworthy and remarkable. The pandemic paved the way for more stock market account openings, especially among the working population who previously spent their disposable income on travel or shopping. Since more Filipinos have become interested in stock investing we’ve beefed up our investment literacy activities because we want new investors to understand the risks and reward of the investment instrument they’re getting into.
Partnering with schools
From hosting investment webinars once every quarter, PSE now hosts two webinars monthly that covers a wide range of topics, from the basics of stock investing to analysis, understanding corporate disclosures to discussions on investing during a pandemic. The webinars since the start of the year have garnered over 17,000 views and reached close to 250,000 users on Facebook. These numbers are expected to increase since the webinars are retained for on-demand viewers on our official Facebook and YouTube accounts that have over 371,000 and 10,300 followers respectively. These two social media platforms have also registered 8.5% and 15.3% increases in followers in the first eight months of 2021.
On the platforms where the webinars are shown, a third of the viewers are Filipinos based overseas, living in countries including United Arab Emirates, Saudi Arabia, the U.S., Singapore and Qatar. To augment our own webinars, PSE also accepts invitations from private companies, academic institutions and government agencies for talks on stock investing. Since the start of the year, the Exchange has already participated in 14 webinars organized by these groups.
Another PSE financial literacy program that has leveraged technology is the Certified Securities Specialist Course (CSSC) which is offered with a partner academic institution. Pre-pandemic, the classes were held on weeknights or weekends at the campus of PSE’s partner schools. Our first online CSSC debuted in June this year at the De La Salle College of Saint Benilde School for Professional and Continuing Education. It attracted close to 100 enrollees, a definite improvement from the average student count of 40 for the offline CSSC. The students work in a variety of sectors such as audit, business process outsourcing, construction, finance, health care, legal, logistics, manufacturing, real estate and utilities.
Bringing investor education to the nation
For some time we had been focused on the idea that a short course on capital markets should be done within the confines of a classroom. While an in-person class definitely has its advantages, the notable benefit we saw in holding an online course is the much wider student reach. Access to capital markets, even literacy programs related to the industry, has always been a challenge in the Philippines where financial activities are concentrated in the National Capital Region (also known as Metro Manila), where only 12% of the country’s population resides. Now we have enrollees from different parts of the Philippines. In fact, even Filipinos based in Southeast Asia and the Middle East now attend the weekly CSSC classes.
Among our online CSSC students is Faricia, an employee based in the province of South Cotabato in Region XII, which is in the southern part of the Mindanao island. Faricia started her investing journey in 2015 and acknowledges she still has a lot to learn but weekly four-hour round-trip flights to Metro Manila from her province would have been very costly and time consuming. So when the announcement for the online CSSC was released Faricia wasted no time in registering. Though she was apprehensive about signing up for the class due to her workload, Faricia pursued the opportunity in the knowledge that a similar online course may not become available again for someone like her who lives 543 miles away from Metro Manila.
It’s our hope that more Filipinos will invest in the stock market but we don’t want them investing blindly. Accordingly, the PSE will continue to look for opportunities to democratize access to investment literacy. This pandemic showed us the importance of financial preparedness and we want to remain at the forefront of investor education initiatives in the country.
Among the activities being prepared by the PSE is a two-day financial literacy and investment summit in January 2022. The Exchange aims to attract thousands of attendees to this event, which will feature plenary sessions with renowned finance and investment professionals in the country and breakout sessions with specific investment topics.
The views, thoughts and opinions contained in this Focus article belong solely to the author and do not necessarily reflect the WFE’s policy position on the issue, or the WFE’s views or opinions.