Philippine Stock Exchange: An education in life support

Published by: Ramon S. Monzon, President and CEO, The Philippine Stock Exchange, Inc. Sep 2020

The COVID-19 pandemic is far more than a public health crisis. It has adversely impacted the global economy causing an unprecedented number of businesses to close. This in turn has resulted in the highest unemployment rate ever worldwide.

The Philippine government’s Labor Department reported that close to 255,000 overseas Filipino workers (OFW) have been repatriated as of mid-August, among them workers in the tourism and travel industry, which is one of the hardest-hit sectors.

Cruise ship employee, Nikka Santiago, lost her job and had no choice but to return to the Philippines last July. Knowing that she would not be able to continue supporting her family, she had to do two things: look for a job and invest the money she was able to save during her five-year stint as an OFW. Through Facebook, she learned about the stock market 101 webinar being offered by The Philippine Stock Exchange, Inc. (PSE). She joined the August 14 webinar session, and soon afterwards opened a stock market account. According to her, she has always thought of investing but she was afraid of diving in. The webinar she attended gave her the confidence to actually start her equities investing journey.

Nikka is just one of many Filipinos here and abroad who have benefitted from the webinars conducted by the PSE. “We have been doing physical seminars for over two decades now. Given the limited audience of a seminar, we opted to go online through webinars six years ago, so Filipinos based in the provinces and overseas can learn about stock market investing,” said PSE President and CEO Ramon S. Monzon.

The webinars cover topics such as the basics of investing, anatomy of a product or asset class, fundamental and technical analyses, and portfolio management, among others. “We stopped conducting the face-to-face seminars in our building due to the pandemic but we changed our quarterly webinar schedule to one that was conducted weekly,” Mr. Monzon added.

The stock market 101 webinar was patterned after the seminar format wherein three speakers are featured in a 1 ½-long session. The PSE speaker gives an overview on the stock market while a guest stockbroker talks about the basics of investing, and a representative of the Capital Markets Integrity Corporation (CMIC), which has oversight function on broker-dealers, discusses investor protection. A question and answer segment follows the discussion. The same webinar that is broadcast on the webinar platform is also streamed live on PSE’s Facebook account. The seven webinars available on Facebook have an average of 9,500 views.

Academic institution partnerships

Aside from the regular Saturday seminar hosted at the PSE headquarters, which draws an average of 80 to 100 participants, a few other financial literacy programmes have been put on hold. Previously, the PSE would visit major cities outside of Metro Manila to reach more Filipinos in the main islands of Luzon, Visayas and Mindanao for an investment literacy roadshow. These events, which feature speakers from the PSE, CMIC, Securities and Exchange Commission (SEC) and stockbrokerage firms that are event partners, typically get 800 to 1,200 attendees.

A key feature of the roadshow is the broker expo, wherein stockbrokerages have kiosks at the event venue to allow onsite account opening for roadshow attendees. The PSE also used to accept requests for company visits. Usually initiated by a company’s human resources department, they would invite the PSE to give a stock market 101 for their employees. For the more market savvy audience and those who want a more intensive capital market course, the PSE developed the Certified Securities Specialist Course (CSSC).

The Exchange has partnerships with six well-recognized academic institutions in the Philippines that offer and run the courses. Industry practitioners and experts teach 14 modules. Students are also required to take a final exam and if they pass the entire course, they get a Certified Securities Specialist designation. The PSE is considering virtual company visits while preparations are underway for a purely online class for the CSSC.

A fun way of creating buzz about the PSE and its financial literacy activities and stock market investing in general is through the annual PSE Bull Run. Held every first quarter of the year, the Bull Run attracts an average of 2,700 participants (although unfortunately, the 2020 Bull Run was cancelled due to the pandemic).

Online IPO subscription platform

Given the increase in online activity, the PSE endeavours to provide more informative, useful and engaging stock market and financial literacy content on its social media accounts. The monthly average impressions on PSE’s Twitter account from March to August 2020 were 1.31 million, 65% higher than the same period in 2019, while the monthly average reach on its Facebook account was 298,000 from March to August 2020.

These social media accounts have also been the Exchange’s platform to inform investors and the general public about its latest products and services such as PSE EASy (Electronic Allocation System). PSE EASy is the online initial public offering (IPO) subscription platform for local small investors (LSI). The PSE mandates that at least 10% of an IPO should be allocated to LSIs. Previously, LSI IPO subscription was done manually and face-to-face, which limited the participation to investors based in Metro Manila.

With the PSE EASy, investors from over 20 countries and 62 of the 81 Philippine provinces have participated in the LSI programme so far. Social media outlets have also been utilised to warn people about scams and the types of illegal investment solicitations that are targeting individuals who want to invest in the stock market.

“Our financial literacy programmes have always been rooted in inclusivity. Filipino money culture is not pro-investing but we’re working to gradually change this. We hope that our various financial literacy initiatives will encourage people to start investing in stocks, mutual funds, ETFs and REITs. We have collaborations with our regulator and other industry stakeholders to make investing a way of life among Filipinos,” Mr. Monzon explained.