Silver lining amid pandemic: More Pinoys investing in stocks

MANILA – More Filipinos have started investing in the stock market as they take advantage of the decline in share prices amid the pandemic, while some plan to increase their stock exposure in the next six months, a report indicates.

“A lot of people were not spending so much (because of lockdown) so a lot of what they were able to earn, they are throwing back into different types of investments,” Juanis Barredo, chief technical analyst at online stockbroker COL Financial Group Inc., said in a briefing Thursday.

Barredo said those who started investing in stocks when the market bottomed in March last year likely made “good money” as it soared back last November.

The Philippine Stock Exchange index (PSEi) plunged to 4,000-level in March 2020 during the start of the implementation of enhanced community quarantine. It regained the 7,000-level starting Nov. 10 but it closed Friday at 6,600-level.

“And for that time, it created wealth, people talked about it, they drew in many people. That’s why I would say, the account openings just jumped like anything to all the online brokers,” he said.

Barredo also underscored the aggressive trading strategies implemented by these new investors despite the pandemic.

“Before, people would buy the safest stocks because they were so scared. Now, they come in with so much aggressiveness that is why, we have seen a different type of retail investors,” he added.

COL Financial chief equity strategist April Lynn Tan said the Group opened 72,000 new accounts in the first nine months of 2020 alone, bringing end-September with 404,000 customer accounts.

“During the pandemic, when we began the lockdown, that was the time like all of a sudden they started (opening) the accounts,” she said.

Tan said the stockbroker only gained 40,000 new accounts in 2019 as against 2018.

Barredo said investors aged between 22 to about 30 comprise most of these new accounts.

“We are breaking records on a weekly basis in terms of activity,” COL Financial president Dino Bate said.

Meanwhile, COL investor sentiment report for first quarter 2021 shows that most surveyed investors are optimistic about the recovery prospects of their companies and are “feeling less bearish” compared to the start of 2020.

Almost half of them cite the speed and accessibility of the coronavirus disease 2019 (Covid-19) vaccination as the risk they are most concerned about for the stock market in the next six months, it said.

“They are looking at what the government is doing in terms of trying to make sure that they are able to roll this out to as many as people as possible in the first half so that we can go back a bit of normality in the way we do things,” Bate said.

The report added the majority of surveyed investors are planning to increase their stock exposure in the next six months, while half of them will concentrate their investment action on blue chips or index stocks in the short term.

Bate said surveyed were active investors with portfolio sizes of PHP50,000 to less than PHP1 million, and premium customers with portfolios of more than PHP1 million.

“But bulk of that I would say, the average size of the account would be about PHP200,000 to PHP300,000, the size of the portfolio of these people,” he added.