The Philippine Stock Exchange, Inc. (PSE) reported that the local small investor (LSI) tranche for the initial public offering (IPO) of Kepwealth Property Philippines, Inc. (KPPI) registered a 94 percent subscription take-up, a remarkable improvement in LSI participation compared to all previous IPOs. The PSE’s LSI program requires companies conducting an IPO to allocate ten percent (10%) of shares they will be offering to the public to LSIs. Investors can participate in the LSI program by subscribing to a minimum board lot up to a maximum of P100,000.
KPPI was the first IPO to use the Exchange’s new online LSI subscription platform called PSE Electronic Allocation System (PSE EASy).
Prior to the launch of PSE EASy, investors who wish to subscribe to LSI shares during IPOs had to: 1) personally go to the designated kiosks in the PSE office or select Metro Manila malls; 2) present the required identification cards to obtain a Share Subscription Form; 3) fill out the form; 4) personally bring the form to the office of their stockbroker for acknowledgment; and 5) bring the form back to the kiosk to make payment. These tedious requirements discouraged a lot of small investors from investing in IPOs, especially since the maximum amount they could subscribe to at that time was limited to just P25,000. With PSE EASy, after a one-time online registration process, LSIs may subscribe to IPO shares whenever a company debuts in the stock market. The PSE also increased the maximum limit for an LSI to P100,000.
“PSE EASy was developed by the Exchange to expand the reach of IPOs to more LSIs all over the country by allowing them to subscribe to IPO shares online. We are pleased with the LSI reception to PSE EASy, as evidenced by the remarkable improvement in the LSI take-up of KPPI from an average of 12 percent for all previous IPOs to 94 percent, a staggering 683 percent increase. We are optimistic that upcoming IPOs will also see a brisk take-up from LSIs, especially since the KPPI IPO proved to be very profitable for the small investors, with KPPI rising by 42 percent on its first trading day from its IPO price,” said PSE President and CEO Ramon S. Monzon.
“The favorable result of PSE EASy’s pilot run attests to the efficiency of the online platform as it saw the participation of local small investors from 25 provinces across 12 regions in the KPPI IPO. PSE EASy is definitely a successful, concrete step towards financial inclusivity which is an objective not just of PSE but also our regulators. This is the first IPO where investors from as far north as Ilocos Norte to investors down south in Zamboanga invested in an IPO,” Mr. Monzon added.
Investors who want to participate in the LSI program of an IPO may create an account and register through the PSE EASy website at https://easy.pse.com.ph