What could the PSE change to get retail investors more excited about the PSE?

Thank you to the record 216 readers who participated in this FSF survey and shared their suggestions for how the PSE could make the exchange more appealing to retail investors. I’m going to share (anonymized) some of the responses that I received. But first, given the huge number of responses, I thought it would be interesting to see if any overarching themes were present, and then provide some of the comments that were representative of that theme. Here we go! 

#1: Lower fees / taxes (20%)

• Lower the tax for every transaction as well as the tax for dividends
• No taxes on dividends from stocks held longer than 5 years
• Get rid of commissions; brokers already profit off our deposits
• Reduce fees charged by the PSE for IPOs; gov’t will earn more through (other) taxes

#2: Education campaigns and better marketing (18%)

• Market and educate masses why investing shouldn’t be scary and exclusively for the rich
• Offer free beginner seminars to encourage more people to invest. More people investing usually raises stock prices
• They should advertise it
• Much better communication. Even kids in US are well aware of stock trading, we don’t do the same thing
• Do better marketing on platforms with older people with the capital to invest (Facebook)
• Feature “layman” discussions such as Merkado Barkada as a way to onboard investors
• Deliver information to the market that “keeps up with the times”
• Tone down the smugness; stop copying the US and recognize that our market has specific needs
• Entire marketing scheme feels too exclusive and elitist

#3: Improving accessibility and user experiences (15%)

• Improve ease of creating / linking the PSEeasy account
• Fractional shares for everyone. Do away with board lots
• It would be best if PSE will shorten the trading hours just like during Covid which is until 1pm
• Sachet(fractional) shares!
• Create “Unified Investor Account ID” to allow quick and easy transfer between brokers
• Communicate in English, Filipino, and Cebuano (at least)

#4: Enforcing regulations and protecting investors (15%)

• Protect Retail Investors by implementing penalties to erring companies such as AR
• One thing that could get me riled up is for PSE to enforce its policies and safeguard retail interests
• Actual and thorough investigation of insider trading
• Make punishments favorable to investors, not the PSE’s bank accounts

#5: Offering more investment options (12%)

• Add more ETF options that track local / foreign markets (Indonesia/Japan/US)
• Give us market orders
• Shorting!
• Maximize IPO listings (1 per month) 
• Introduce more local public companies to their exchange, regardless if a subsidiary of an MNC
• Create thematic indices (like what we have in Merkado Barkada haha)
• Require more ETFs
• Options trading!

MB bottom-line:  So many great suggestions! Some are immediately actionable (communicating in additional languages), and some depend on a series of fractional improvements first to become possible (like options trading). Some are well within the PSE’s control to lead the change on (board lots), and some are not (insider trading; it’s ultimately the function of the SEC to prosecute this). While our market is absolutely dominated by institutional investors (US markets are no different), I think that the depth and breadth of the crypto explosion demonstrate that there’s marketshare there to be won. In some ways, it feels like the existential crisis that music and movie studios faced in the 1990s and 2000s with piracy. I’m not saying that crypto traders are pirates (if so, then I’m one of them), but I’m just trying to make the point that the “product” here isn’t the PSE name or the companies that trade on the exchange. The product is just “investing”. If users can get their “investing” at a cheaper price and easier someplace else, that’s what they’re going to do. The way to fight, for the PSE, is not to improve the quality of their companies, but to reduce friction (cost and difficulty of use). The PSE has made strides in this area (PSE EASy is a good example, as is the coming evolution of GStocks and Maya trading), but companies don’t get credit for what they’re trying to do: they get credit for what actually gets done. They get credit for results. And here are 216 retail investors straight-up saying what would take to improve their experience. The feedback is worth considering.

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