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MANILA, Philippines – If you want to invest in stocks but have a tight budget, 2024 may just be the year for you.
The Philippine Stock Exchange (PSE) is proposing to amend the board lot, a system that determines the minimum number of shares one can buy or sell, as the local bourse aims to entice Filipinos with a limited budget to invest. This will significantly decrease the minimum investment to buy stocks to as low as P100 in 2024.
Trading of stocks is done by board lot or round lot system. The current board lot table below determines the minimum number of shares one can purchase or sell at a specific price range. The minimum amount needed to invest in stocks varies and will depend on the market price of the security as well as its corresponding board lot.
For example, one can’t simply buy one share that’s worth P0.50, as you will be required to buy at least 1,000 shares.
The amendment of the board lot is one of the many proposed reforms of the local bourse operator, which is expecting a rebound for Philippine equities in 2024. The amendment is currently pending approval by the Securities and Exchange Commission.
Recall that mobile wallets GCash and Maya have launched their respective stock trading platforms in 2023, yet trading activities remained muted in 2023 despite millions of Filipinos having access to these apps. The PSE plans to form more partnerships with fintechs to enable stock trading in other applications.
The PSE is also looking at lowering taxes to foster stock market investment. These include:
- the reduction of the stock transaction tax from 0.6% to 0.1%; and
- the reduction of dividend tax to non-resident aliens from 25% to 10% to harmonize the cash and property dividend rate.
To entice the public to invest, the PSE is set to have monthly TV interviews and amplify its presence on Viber. It is also set to reach out to overseas Filipinos through various investor education programs, which will be conducted alongside the Department of Migrant Workers.
2024 was another sluggish year for Philippine equities. The PSE index ended 2023 lower by 1.8% to 6,450, the second consecutive year of decline, as inflation and interest rate hikes pushed investors to put their cash to less speculative assets.
Daily average value turnover was just at P6.09 billion in 2023, a 16.5% dip from 2022's P7.3 billion average.
On the first trading day of 2024, the PSEi rallied by 1.6%.
Expected improvement in the economy includes higher gross domestic product growth, with the Philippines poised to lead the ASEAN region at 6.2%. Inflation is projected to decrease close to 4%.
"We welcome 2024 with hopes of a better performance for the stock market. We are also optimistic that our regulator will continue to support the initiatives we will introduce to boost participation and liquidity in the market," said PSE president and CEO Ramon Monzon.
The PSE is expecting six initial public offerings (IPOs) for 2024, starting with the listing of Citicore Renewable Energy Corporation.
Meanwhile, the capital raising forecast is P175 billion, around P40 billion of which will come from IPOs. –Rappler.com