WITH markets still down, it is quite hard to talk about economic recovery.
This, however, did not deter the Philippine Stock Exchange Inc., the operator of the country’s equities trading market, from rolling out several projects to reach the general public that it hopes would invest their hard-earned money with them.
After several market roadshow events during the pandemic, meant to show the public how trading should be as easy as 1-2-3, PSE President and CEO Ramon S. Monzon said they are now going to schools to target the students.
“We’re just giving them access to the market,” Monzon said.
“There’s only one solution for that and that’s investor education. We cannot tell an investor, ‘don’t buy this stock or buy this.’ We have 1.6 million investor accounts,” Monzon said.
That figure—1.16 million of which are online accounts—pales in comparison when compared with the country’s neighbors that have a lot more, way more.
To grow that figure, Monzon’s newest market activity was to trade using the fintech platform such as GCash.
Monzon said the initiative may be a game changer for stock trading in the country that could easily double or triple the 1.6 million accounts currently registered at the bourse in just a short period of time.
The PSE’s accounts are only growing at a compounded annual rate of about 31 percent during 2016 to 2021.
Monzon said the PSE will also launch a data analytics platform by the end of the year, which will open access to market data for retail investors. He said the program aims to democratize access to market data which is currently limited to big stockbrokerage firms.
Monzon said it will address retail investors’ needs for market data that can aid them in their investment activities.
SEC’s investor education
Meanwhile, at the Securities and Exchange Commission, the corporate regulator also promotes investor education through webinars and information education materials, which could enable them to choose which investments options are legitimate or not.
Central to this strategic initiative is the celebration of Investor Protection Week every second week of November.
The event is a chance for the agency to further highlight its investor education efforts and to remind the public of the dangers of falling prey to investment scams.
The SEC also partners up with public and private organizations who share in its advocacy of promoting financial literacy for Filipinos. Currently, its network consists of 46 entities, including 28 local organizations which have been tapped by the SEC’s nine extension offices.
Educating the public, however, is hard, especially when the market is down. At the moment, the benchmark Philippine Stock Exchange index, or the PSEi, was trading at 5,900-point level, as inflation figures are also higher than what the Central Bank wants. This may mean more rate increases as the year ends.
With yields going down, people were looking for assets that can grow their money. One of the options is cryptocurrency trading.
Compared with the online accounts at the PSE, reports suggest that there are 16 million accounts owned by Filipinos in Bitcoin, one of the many trading platforms of cryptocurrency.
Cryptocurrency is digital money that is secured by blockchain technology. Cryptocurrency investing can take many forms, ranging from buying cryptocurrency directly to investing in crypto funds and companies.
Cryptocurrency can be bought using a crypto exchange or through certain broker-dealers. Many central banks do not agree on its fundamental concept, but it has been making its way into the market, and many of the entities are not registered with the SEC.
The SEC said that by law, an entity is required to register and obtain a primary registration with the SEC if it intends to conduct business in the Philippines.
“Dealing or transacting with registered domestic corporations or foreign corporations with registration to do business as a branch, regional operating/area headquarters or representative office within the Philippines assures domestic parties that they are duly protected by Philippine laws,” it said.
And this, for the SEC at least, is where it gets exciting.
Fraudsters have become more creative in order to confuse the public as to the nature of their activities, using the current trends as their main weapon.
The SEC noted that investment scams have taken the form of primarily Ponzi schemes or those promising high returns with different variations.
Many of these schemes were masked with new or complex business models and concepts such as cryptocurrency trading, foreign exchange trading and even franchising—every avenue where it can get the money flowing to their pockets.
“Other scams offer compensation plans with incentives for recruitment or referrals, commodity futures trading, contracts for difference, binary options trading, foreign exchange swaps, cryptocurrency trading, advance fee fraud, affinity fraud, among others,” the SEC said.
The anonymity that the Internet offers, it added, “has provided scammers [with a venue] and has made it easier than ever for an individual or company to operate a scheme, stop that scheme as soon as authorities flag it, and start another one under a different name.”
The SEC thus reiterates its reminder to transact only with entities that are registered with the agency. Corporations soliciting investments from the public must also have a secondary license issued and approved by the SEC.
The agency also advises the public to be vigilant and conduct their due diligence before transacting or dealing with any entity, and to avoid transacting with corporations or entities without any registration or license to do business in the Philippines in order to avoid losing their earnings.
Investors’ education is the solution to all of these market woes, according to the regulators.
They educate the people extensively while prices are down, and also to protect them from scammers. All this, to prepare them for the eventual rise of the market.
Image credits: Nonie Reyes