More Pinoys seen investing in stocks amid pandemic, 3 IPOs eyed this year

ABS-CBN News

Posted at Jan 14 2021 11:56 AM | Updated as of Jan 14 2021 11:59 AM

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MANILA - More Filipinos are investing in the stock market, the head of the Philippine Stock Exchange said on Thursday.

PSE president Ramon Monzon said local investors now make up 25.9 percent of total retail investors versus 18.2 percent a year ago.

He added that despite the exit of many foreign investors from Philippine equities due to the pandemic, the market has been able to sustain volumes thanks to local investors.

"Net foreign selling for 2020 is about P120 billion, and yet we are able to sustain the volumes in our markets. Obviously, it is the domestic investors that played a very significant role in taking up stocks," Monzon said in an interview with ANC Market Edge on Thursday.

Monzon said 2021 is a "positive" year for the stock market as more firms will turn to equities to raise capital as banks keep lending requirements tight.

"Lending standards of banks have become more restrictive. There are a lot of companies who will have difficulty in raising debt financing, so they will probably have to go to the equity markets to raise their financing requirements," he said.

He noted that the revised listing rules, which will be "approved soon", will make it easier for companies to list in the stock market.

The PSE has been focused on increasing the number of listed companies to be on par with its Southeast Asian neighbors.

Monzon also listed developments at the PSE for 2021, which are:

  • Targeting 3 initial public offerings (IPOs) and 4 listings of real estate investment trust (REIT) by the end of the year.
  • The approval of short selling from the Securities and Exchange Commission "hopefully by first quarter" of the year.
  • New sector classification to be implemented by the first half of the year. This will raise the current 6 sectoral indices to 8, classifying them in particular sectors.
  • Launch of 2 thematic indices by the second half of 2021 for mid-cap firms and dividend yield plays.
  • The enhancement of PSE EASy by the second half -- to allow investors to subscribe not just to IPOs, but also to stock rights and follow-on offerings.
  • A new digital clearing and settlement system by the fourth quarter.

Monzon said investor confidence is recovering due to the expected rollout of COVID-19 vaccines.

"Just with the announcement of the new vaccines, this created a big change in the confidence of investors, and companies to proceed with their planned activities," he said.