PSE, First Metro introduce retail-based stock trading

CEBU, Philippines - The Philippine Stock Exchange (PSE), in partnership with First Metro Investment Corporation (FMIC), has introduced a new product to make stocks trading easy and affordable to the mainstream market.

The product called exchange traded funds (ETFs) is being offered by the PSE with Cebu-based brokerage firm FMIC as the fund manager.

ETF is a retail-based selling and buying of stocks where an investor need not have to own a company to participate in the stock market and take advantage of its upswing performance.

The ETFs were approved by the Securities and Exchange Commission (SEC) in January this year.

This product is a combination of stock and mutual funds that allows the investors to buy and sell the share directly from the exchange market.

It is both a security and investment instrument that monitors a commodity of assets-like index fund but trades like a normal stock in an exchange.

FMIC initially filed for a P1 billion fund with SEC and has P250 million in paid-up capitalization.

In an interview with PSE chief operating officer (COO) Roel A. Refran, he said that the stock exchange is promoting different projects for retail investors in the Philippines, specifically in Cebu, as Cebuanos have become savvy and interested to make stock market as their main investment instrument.

“We see a lot of potential investors here in Cebu especially from the younger generation as they are more open-minded and look at a lot of information available online,” Refran said.

According to Refran, 52 percent of the investors in the stock market last year were foreign investors registering P109.98 billion in investments, which was a 94.6 percent increase from only P56.52 billion in 2011.

Domestic investors were slowly catching up with P61.68 billion or an increase of 84.9 percent from that of 2011.

“All these are positive indicators. We are seeing a lot of interest from local investors especially with the many affordable products being offered now,” said Refran.

Refran added that PSE has been in the constant dialogue with SEC at the technical and strategic level “so we can both push the capital market forward with some of the new products that have been long waiting in the wings.”

Moreover, the PSE inked memorandum of understanding (MOU) with the Singapore Exchange (SGX) last March 2013 for the mutual cooperation on the development of Philippines-linked derivative products.

 At present, the local stock market in the Philippines is in the midst of an unprecedented run in long history. As of May this year, the PSE is the third best performing benchmark index among selected Asian indices with a year-to-year growth rate of 26.1 percent. /JMD (FREEMAN)