Individual Investors Are Taking Record Chunks of Philippine IPOs
Individual Investors are Taking Record Chunks of Philippine IPOs
(Bloomberg) -- A new Philippine system that allows individual stock investors to subscribe to initial public offerings with the click of a mouse has helped drive up their participation to all-time highs ahead of a spate of listings this year.
The Philippine Stock Exchange’s Electric Allocation System, dubbed PSE EASy, eliminates the tedious process of investors placing orders at kiosks set up by underwriters, validating them with brokers and then paying through banks, the exchange’s COO Roel Refran said in an interview.
Retail investors accounted for a record 9.4% of Kepwealth Property Philippines Inc.’s IPO in August when the web portal was first used, far surpassing the 1.2% historical average, Refran said. With the number of EASy sign-ups growing seven-fold since, he expects even greater participation for upcoming listings, which include Metro Pacific Hospital Holdings Inc. and AllHome Corp.
The web portal provides smaller investors direct better access to IPOs, in which funds often quickly snap up shares allocated to brokerages, according to AAA Southeast Equities Inc. President Matthew Cabangon. One in four of the broker’s mostly retail clientele has signed up to EASy, he said.
Individuals can subscribe to as much as 100,000 pesos ($1,914) worth of IPO shares through the web portal, compared with an over-the-counter cap of 25,000 pesos.
The PSE will launch a related mobile application in the fourth quarter of 2019, followed by an online payment portal.
To contact the reporter on this story: Claire Jiao in Manila at cjiao5@bloomberg.net
To contact the editors responsible for this story: Cecilia Yap at cyap19@bloomberg.net, Kurt Schussler, Margo Towie
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