Friday, June 25, 2010

Philippine Stock Market

The Philippine Stock Exchange has been continuously educating the public about stock market investing. It is now starting to draw attention from a diverse group of investors from all income levels. The stock market is slowly being noticed as a feasible investment medium despite the economic crisis. A recent study from the Philippine Stock Exchange (PSE) showed that even the middle-income and lower middle-income classes are now investing in the stock market.

It is interesting to note that most of the retail investors trading online earn less than P500,000 a year and more than half of them were 30 to 44 years of age. This group of investors is now presenting a high growth sector for our trading participants. That is according to Val Antonio Suarez, Philippine Stock Exchange (PSE) chief operating officer.

For 2009, the study found that in terms of:

Annual Income:

About a third or 33.8% of those who invest in stocks only earn less than P500,000/year. Including the biggest investors (41%) were those in the earning bracket of between Php500,000 and Php1 million yearly, while the rest (25.3%) belonged to the high-income group or those whose annual salaries amount to more than P1 million. Data on the annual income of investors was gathered from 77 brokers

Men are more willing to invest in stocks. Total male investor accounts amounted to 69,589 or 56.4% during the period compared with 53,732 women investors’ accounts which represented 43.57%. The data was gathered from a total of 82 brokers.

A large part of retail investors belonged to the 45 to 59 years bracket at 40.9 percent. Retail investors in the stock market are mostly professionals. Furthermore, most local retail investors or 86.5% are based in Metro Manila.

The study also showed that local investors continued to grab largest portion of trades in 2009 while the number of foreign investors in the stock market was notably higher as sentiment over the recent global economic crisis eased.

Local investor accounts increased 6.7% to 469,467 accounts in 2009 from 440,104 accounts in the previous year. These comprised 98.6%of the total investor accounts registered at the PSE in 2009.

Data was gathered from a survey of 132 active trading participants submitted last December.

Total investor accounts meantime rose 7.1% to 476,194 accounts from the previous year’s total of 444,680. Of this, foreign investor accounts only represented 1.41% or 6,727 accounts. Despite this, foreign investor accounts grew by a remarkable 47% in 2009 from 4,576 accounts in 2008.

Retail accounts or those owned by individuals grabbed 94.4% or 449,545 of the total investor accounts in 2009. The remaining 5.6% or 26,649 were institutional investor accounts or those held by corporations. Initiatives of the PSE include integrating capital market topics in high school and for college students through business administration courses. The PSE is also studying the possibility of institutionalizing a degree program that is focused on capital markets. The introduction of capital markets at an early stage in the Philippine education system forms a base of future investors. By doing this, the public realizes the importance of savings and investments which also contribute to several economic benefits.

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