Retail investors dominate PSE as lingering pandemic reshapes stock market

MANILA, Philippines — Retail trading is on the rise on the Philippine Stock Exchange, with the pandemic further boosting the number of online accounts in what could be a clear sign of investors' shift on trading format.

There are 1.4 million accounts in the stock market in 2020, up 13.7% year-on-year, the PSE said in its Stock Market Investor Profile (SMIP) report released Wednesday. About 97.9% of the total number of accounts belong to retail investors while institutional investors owned 2.1%, the PSE added.

For the third straight year, online accounts dominated the local bourse after cornering 67% of the total, while traditional accounts got a smaller 33% share. Broken down, online accounts grew 19.7% on-year to 936,200 in 2020, outperforming non-online accounts which went up 3.3% to 460,553.

For Ramon Monzon, PSE president and chief executive, the increase in online trading accounts meant greater accessibility for the public.

“The preference for opening online accounts continues to rise since technology has made investing more accessible to investors. At the PSE, we also continue to enhance and develop online services that will benefit the investing public,” Monzon said.

“The REIT (real estate investment trust) listings we’ve had attracted a good number of retail investors, particularly Local Small Investors who use PSE EASy for their initial public offering subscriptions. We expect the upcoming IPOs (initial public offering) and REIT listings to continue to support the growth in retail investors,” he added.

Last year, the pandemic briefly halted trading at the stock exchange after its headquarters was forced to close doors as quarantine measures swept Metro Manila at the time. When lockdowns eased, on-site trading was allowed under strict health protocols, but trading has been shortened to four hours from the original seven hours.

A surge in market accounts in 2020 meant an increase in daily trading activity to 33.7% on-year while retail participation, pertaining to trading of retail investors, rose by as much as 47.8% annually.

“We noted that there was a 35.6 percent increase in the number of active accounts last year. The pandemic prompted retail investors to actively participate in the stock market,” Monzon said.

According to the PSE, investors aged 30 to 44 held 45.6% of stock market accounts last year. They are followed by young investors aged 18 to 29 at 22.5% while the balance was comprised of those in the age groups of 45 to 59, and 60 and above. Most of them enjoyed a career in corporate. If they weren’t climbing the corporate ladder, they would often be blue-collar workers, such as overseas Filipino workers.

Retail investors earning less than P500,000 every year made up 61.2% of stock market account holders while 21.6% of retail accounts were owned by those with an annual income of P500,000 to P1 million.

Meanwhile, the gender gap in retail trading persists, with male investors accounting for 50.8% of total accounts while female investors cornered 49.2%. However, more women owned online accounts compared to men.

Domestic investors had a 98.3% share of stock market accounts while investors based overseas held the remaining 1.7%. By nationality, investors from China (21.8%), Japan (21.5%), the United States (14.5%), United Kingdom (4%) and Korea (3.4%) outpace other countries who invested in the local bourse last year.