BSP Governor urges PSE to widen reach
In this Inquirer article, BSP governor Amando Tetangco, Jr. urges the PSE to install the necessary technological infrastructure that will allow Filipinos outside of Metro Manila to participate in the capital markets: http://business.inquirer.net/56647/bourse-urged-to-go-nationwide
I agree with Governor Tetangco wholeheartedly. I think this move will be beneficial, not only for the investing public but also to companies seeking capital for their entrepreneurial venture. I have read in some analysis that Philippine stocks are deemed “expensive” relative to other stocks in the Asian region. I take this to mean that the investing public has an appetite for equities and this should encourage more companies to go public. Imagine how much more capital will be available if the PSE will be able to successfully rollout a mechanism that will allow Filipinos outside Metro Manila to directly participate in the local bourse. The article cites a survey that says that less than one percent of Metro Manileños invest in the capital markets while the number for people surveyed outside Metro Manila is almost zero.
Aside from this increased participation from the investing public, such technological infrastructure will also bring public equity closer to companies in the provinces, making them more productive. I would even go as far as suggesting that a second independent stock exchange be opened in Cebu to cater to the equity financing needs of Visayas-Mindanao businesses. Of course, this goes against the grain of the trend of consolidation among exchanges all over the world. PSE needs to do a better job at promoting investment into equities and using the equity market to raise capital.
The last item on my wish list would probably be an alternative exchange for emerging companies/small caps. This will be a great way to support our small- and medium-sized enterprises/small- and medium-sized industries who might find it hard to comply with the requirements of the PSE’s main board but are in need of capital that bank loans will not be able to provide. Once we bridge that crucial funding gap, I am optimistic that we will see a lot of our industries succeed.