Stock Market Investor Profile 2016

Growth in stock market accounts driven by higher number of online investors

The annual Philippine Stock Exchange (PSE) report on stock market accounts shows that online accounts went up by 27.8 percent to 302,516 from 236,669 in 2015. Meanwhile, the growth in the total number of stock market accounts, which include both online and traditional accounts, was at 8.5 percent, from 712,549 accounts in 2015 to 773,187 at the end of 2016.

"Technology has played a big role in the growth of our investor base over the years. We are pleased to see that more Filipinos have continued to adopt online trading to invest in the stock market," said PSE President and CEO Ramon S. Monzon.

Investors with online accounts trade themselves, typing in their buy or sell orders on their online trading platform whereas investors with accounts in traditional stockbrokerage firms have to call their broker to place their orders. The minimum required amount to open an account and the broker’s fee of online stockbrokerage firms are usually lower compared with their traditional counterpart. Online investors are typically provided research materials by their online broker while investors of traditional firms also get research reports and they can discuss their investing options with their broker.

The continued growth in online accounts also translated to higher trading activity. In 2016, 53.7 percent of total market transactions, measured in terms of number of trades, were accounted for by online accounts. This was the first year that online transactions were responsible for more than half of the market's total transactions. Online trades registered a 41.4 percent growth in value turnover, which translated to a 9.3 percent share in the market’s total value turnover.

Of the total stock market accounts, 98.2 percent or 759,952 were held by local investors while the remaining 1.8 percent or 13,595 were accounts of foreign investors.

Retail Investor Demographics

The PSE's 2016 Stock Market Investor Profile survey showed that among the retail investors using online and traditional brokering, 43.7 percent earn less than P500,000 annually. This was followed by investors earning above P1 million at 31.1 percent while investors with an annual income of P500,000 to P1 million made up 25.2 percent of the total retail investors.

Meanwhile, close to 40 percent of investors were aged 30 to 44. The 45- to 59-year-old investors covered 26.4 percent of the total count and those who are 60 and above comprised 19.3 percent. The young millennials or those between 18 and 29 had accounted for 14.8 percent of investors.

In terms of geographic location, a total of 96.1 percent of retail investors are based locally while the rest are based overseas. The concentration of retail investors continue to be in Metro Manila which accounted for 70.6 percent of investors. Luzon cornered 16.4 percent of investors with Visayas and Mindanao making up for 6.2 percent and 2.9 percent, respectively. Overseas-based investors comprised 3.9 percent of retail accounts.

"We are pleased with the continued growth of stock market investors in the market.  Clearly, we have a long way to go and we at the PSE will continue our financial literacy programs to demystify stock market investing and make investing as understandable and accessible as bank or insurance products," Mr. Monzon explained.

In the past year, the PSE has intensified its market education efforts by doubling the number of its free seminars both in Metro Manila and in Cebu. To cater to the increasing number of tech-savvy Filipinos, PSE has been regularly conducting free webinars to discuss basic and intermediate topics.  These webinars attract close to 500 participants per session.

Online retail investors younger, more spread across the country

The PSE survey results showed that close to three quarters of online retail investors are aged 18 to 44 years.  Among online investors, 21.7 percent are in the 18 to 29 year old range, 52.9 percent are 30 to 44 years old, 18.4 percent are 44 to 60 years old, while the remaining 7.0 percent were 60 years and above.

In terms of location, retail online investors are also less concentrated in Metro Manila compared to the geographical distribution of total stock market accounts.  For online accounts, Metro Manila investors only accounted for 57.0 percent of the total online accounts, with Luzon, Visayas and Mindanao online investors making up a much bigger share of 26.0 percent, 6.8 percent and 4.2 percent, respectively.  The share of overseas-based clients is also higher at 5.9 percent for online accounts.

The survey also showed that online traders invest even with lesser incomes.  Those earning P500,000 or less annually comprise 60.3 percent of the total online trading population.  Meanwhile, 23.7 percent of online traders earn between P500,000 to P1 million per year and the remaining 16.0 percent have incomes of more than P1 million annually.

"The numbers show that more investors are finding out that participating in the stock market is actually an affordable investment.  We are also happy that our online brokers have been able to reach out to more Filipinos outside of Metro Manila towards making stock market investing more inclusive," Mr. Monzon added.