Special to Manila Mail
Part 1 of 2
MANILA. For many Filipino expats and OFWs, investing in the Philippine stock market is not only a good way of leveraging their foreign currency-denominated income, it is also one of the best ways to increase their assets through capital growth.
Investing in the Philippine market offers risks and opportunities. For starters, it’s a good way for Filipino expats to diversify their portfolio.
Another good reason is that the local equities market is projected to grow in the coming years. In August of last year, for example, the Philippine Stock Exchange (PSE) reported that the number of online stock traders increased by 36 percent, while its retail investor base is expected to reach one million this year.
On the other hand, it’s important to remember that the Philippines is not a mature market. In fact, PSE president and chief executive officer Hans Sicat explained last year that “we have a long way to go when we compare ourselves with the retail investor participation in other markets,” and emphasized the need for “promoting investing literacy through our free stock market seminars, webinars and market education roadshows to facilitate the expansion of investor participation among Filipinos.”
Presently, though, the Philippine stock market seems to be on a roll. Not only is the Philippine economy backed by solid local demand and good fundamentals, the local stock index is also constantly testing its 8,000 point resistance.
Even the political turmoil caused by the Duterte administration’s policies have not discouraged foreign capital from entering the equities market. So there are plenty of good reasons why Filipino expats should consider investing in the Philippine stock market.
For Filipino expats who wish to invest in the Philippine stock market, there are numerous brokers to choose from. Colfinancial is arguably one of the most prominent names in the Philippine investment community. Other good options include RCBC Securities, First Metro Securities Brokerage Corporation and many more.
Aside from large brokerages, there are also individual traders and analysts, including Hernan Segovia, a stock broker who’s also become a celebrity in the Philippine investment community.
Mr. Segovia, who goes by the name Spyfrat online, argued that local investors offer a better understanding of Filipino investor behavior than foreign and US-based brokers who tend to focus only on the fundamentals of Philippine companies. “We locals also look at the technical,” he averred.
In terms of behavior, Segovia explained that most local investors tend to be cautious, preferring to wait for large, foreign investors to drive up stock prices before they put in any capital in themselves. He adds that Filipino investors are prone to “bandwagon mentality” and will take advice from whatever news they find on social media.
“Filipino investors are very sigurista,” he said, “but they are also very greedy.” He further adds that many local retail investors are prone to what he called “hype” and other poor investment behaviors.
“There’s a lot of hype in the market, and they become gambling,” he cautioned, adding that such behaviors help to explain why many Filipinos fear investing in the Philippine stock index.
As for foreign investors, Segovia explained that a considerable feature of the Philippine stock market is that it is driven by foreign capital, a situation that exasperates technical analysts like Segovia, who would like more local participation.
Despite these quirks, though, Segovia said that the Philippine stock market and its local investors are slowly improving, and there are plenty of opportunities for expats who want to join in.
“There’s a lot of room for those untapped investors,” Segovia explained, and adds that expats and OFWs make up a significant portion of his clients.
For those who are interested in contacting local brokers, Segovia says that the process is quite easy. Aside from websites and online communities dedicated to the Philippine stock market, interested investors can also contact them directly via their social media pages.
(To be continued)