As foreign funds leave for countries that are seen to recover from the pandemic earlier, local retail and institutional investors have been picking up the slack in the Philippine equities market during the first month of the year.
The Philippine Stock Exchange (PSE) said local investors accounted for 75.3 percent of value turnover in January with the remaining 24.7 percent of transaction value attributed to foreign investors. This is the highest local investor participation on a monthly basis since March 2010 at 76.2 percent.
The value turnover ratio was 56.8 to 43.2 in favor of foreign investors in January 2020 and 54.6 to 45.4 in favor of local investors for the entire 2020.
“This is the eighth consecutive month that locals outpaced foreign investors in terms of value traded in the stock market,” said PSE President and CEO Ramon S. Monzon.
He noted that, “Trading activity of foreign funds may have abated but liquidity in the stock market has not deteriorated. In fact, daily average value turnover is up 50.3 percent year to date and 82.4 percent year on year.”
In January 2021, the daily average value turnover reached P11.04 billion, compared with P7.35 billion as of end-2020 and P6.13 billion as of end-January 2020.
Meantime, the stock market’s volume turnover hit a record of 1.43 trillion in January 2021 while value turnover for the month came in at P220.85 billion. In January 2020, 22.28 billion shares were traded, valued at P128.76 billion.
Retail investor participation in the stock market also continued to grow. As of January 22, the retail segment accounted for 52.2 percent of value turnover. The remaining 47.8 percent of amount traded came from institutional investors.
“Retail participation started to expand when the pandemic started. In 2020, the retail market was responsible for 26.9 percent of value traded from 18.2 percent in 2019,” Monzon explained.
He added that, “Initial public offerings (IPO) usually serve as the entry point in the stock market of retail investors. We hope to have a robust IPO pipeline this year, including Real Estate Investment Trusts, to further grow the retail market.”
Local Small Investors may subscribe to IPO shares through the PSE Electronic Allocation System (PSE EASy) web and mobile platforms.
Another program for investors by the PSE is its monthly webinars. The PSE is hosting the following webinars this quarter: Back to Stock Market Basics on February 5, Investing in Real Estate Investment Trusts on February 19, Stock Trading Operations on March 5 and Building a Healthy Investment Portfolio on March 19.
“While we hope to see more local and retail investors in the PSE, we also want new investors to at least study stock market basics before investing,” said Monzon.