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Online investors drive Philippine stock market accounts up 12.7% in 2019

The growth of online accounts in the Philippine Stock Exchange Inc. (PSE) drove a double-digit increase in total accounts for 2019, with the local bourse optimistic for 2020.

Data from the annual Stock Market Investor Profile (SMIP) showed that total stock market accounts grew by 12.7% to 1,228,038 in 2019 from the 1,089,413 accounts the previous year.

Online accounts made up for 63.7% of this at 782,118, up 25% from 625,763 accounts the previous year. The remaining 36.3% were investor accounts with traditional stockbrokerage firms.

"Online accounts have been the reason for the steady rise in total stock market accounts in the last 10 years," PSE president and chief executive officer Ramon Monzon said in a separate statement.

"The shift in trading format preference of investors have encouraged stock brokerage companies that cater to retail investors to start offering online trading services to their clients," he added.

Majority of the accounts remained to be retail investors with 1,199,565 accounts, comprising 97.7% of the total. The remaining 2.3% or 28,473 were institutional accounts.

In terms of the investor profile, male investors accounted for 50.2% of the total retail accounts while females accounted for 49.8%.

Investors aged between 30 to 44 years old had the biggest share in total accounts, with a 45.5% share. It was followed by those aged 18 to 29 years (21.7%); aged 45 to 59 years (20.3%), and 60 years and above (12.5%).

Most of the investors or 59.4% were those with an annual income of less than P500,000. This is lower than the 62.4% share in 2018.

Meanwhile, those earning more than P1 million annually cornered 21.5% of total retail accounts, up from 16.6% in 2018. Those earning P500,000 to P1 million accounted for 19.1%, lower than the 21.0% share in 2018.

In terms of location, most investors were based in Metro Manila in 2019, accounting for 75.7% of the total accounts. This is higher than the 62.2% share in 2018.

Investors in Luzon accounted for 13.9%, down from 21.5% in 2018. Visayas accounted for 5.3%, down from 8.9% the previous year, while Mindanao accounted for 3.3%, also down from 4.4% previously.

Overseas investors for the year accounted for 1.8%, down from 3.0% in 2018, mainly coming from the United Arab Emirates, Japan, the United States of America, China, and Singapore.

"While the data we have now is from 2019, we expect the online investor population to increase in 2020 mainly due to investors opening online accounts during the community quarantine period and as investors participate in initial public offerings through PSE EASy (Electronic Allocation System)," Monzon said.

Metro Manila and other "high-risk" areas were placed under an enhanced community quarantine (ECQ) from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.

A general community quarantine (GCQ) was put in place from June 1 to 15, and has since been extended until July 15.

"We hope to see an increase in investors based in the provinces and overseas in the coming months especially as more online stockbrokerage firms validate client applications through videoconferencing platforms, eliminating the need for a face to face KYC (Know Your Customer) procedure," Monzon said.

"With the stock market still trading way below pre-COVID levels, we may see new investors who are looking for good buying opportunities open trading accounts. This may also help prop up our investor count for the year," he added. —LDF, GMA News