Final Output:

Financial Markets Portfolio

(in the Philippines)

Members:

Gayo, Emmanuel John

Malingin, Hadrian
Paculio, Marc Clint
Paraiso, Marl Eduard
Tuazon, Butch

AC-202
(TTh 1:00pm – 3:30 pm)

Submitted to:
Mr. Cenen Zorrila
MONEY MARKET

Money market basically refers to a section of the financial market where financial instruments

with high liquidity and short-term maturities are traded. Money market has become a component

of the financial market for buying and selling of securities of short-term maturities, of one year

or less, such as treasury bills and commercial papers.

Sun Life Prosperity Money Market

The Sun Life Prosperity Money Market Fund presents the least risk amongst all funds, however,

with the lowest possible returns. In retrospect, this Fund provides higher annual returns than your

bank savings account and doesn’t impose any sales load on you.

The Sun Life Prosperity Money Market Fund is for you if:

 You want to have very low risk in your investment, but potentially earn better than

regular current, savings, or time deposits.

 Don’t want to look too far into the horizon? Money Market Funds are beneficial as early

as one year from date of investment.

 You're considering time deposits or opening a new savings account but are wondering if

there are better options.

SB Money Market Fund

The SB Peso Money Market Fund is for investors seeking short term growth by investing mainly

in deposits and BSP-approved fixed income instruments.

About the Fund

SB Peso Money Market Fund (Formerly “SB Peso Ease Fund”) aims to achieve short term

growth by investing mainly in bank and government deposits in short-term fixed income

instruments and all other instruments approved by the BSP. The Fund aims to surpass its

benchmark (gross of fees) which is 100% Philippine 30-Day Average Special Savings Account

Rate (net of withholding tax).

We will be changing our Fund’s custodian from HSBC to Standard Chartered as part of our

continuous efforts in finding the best rates for our customers. The shift shall lower our fund

administration costs, ultimately boosting the returns of our Funds. This will be reflected in the

KIDS as of April 2019.

Client Suitability

SB Money Market Fund is suitable only for investors who:

 Have a moderately conservative risk tolerance

 Seek capital preservation

 Have an investment horizon of six (6) months to one (1) year

STOCK MARKET

The stock market refers to public markets that exist for issuing, buying and selling stocks that

trade on a stock exchange or over-the-counter. Stocks, also known as equities, represent

fractional ownership in a company, and the stock market is a place where investors can buy and

sell ownership of such investible assets. An efficiently functioning stock market is considered

critical to economic development, as it gives companies the ability to quickly access capital from

the public.
How to make money investing in the stock market?

There are over 200 stocks that trade on the Philippine stock exchange. Each of those stocks has a

number of shares.

For example:

If you want to buy shares of Jollibee, Globe Telecom, SM Prime, etc. you’re an actual part

owner of businesses when you buy their shares.  With this ownership comes benefits and risks. If

the companies you buy stock in are profitable, their stock price will likely rise over long periods

of time.  However, if you buy companies that are not profitable, their stock prices will likely fall

over periods of time. This brings us to the two ways you can make money in the stock market.

TWO WAYS TO EARN WITH STOCKS

 Capital Appreciation

 Dividends

If you buy shares in a company, and the company is profitable, the stock price will likely

increase. If the stock price increases, you can then sell the stock on the Philippine Stock

Exchange. You will receive the money you invested in the stock, plus the growth. Also, if the

stock you own pays a dividend, you will receive a dividend while you own the stock. 

For example:

If you owned San Miguel Corporation for 10 years, you would have received dividends over that

10-year time period. Those dividends would have been paid to you in cash – you could have

reinvested the dividends into more stock, or you could have kept the cash. It’s up to you what

you do with your dividends.

Why invest in the stock market?

1. Stocks are the shares of ownership in a corporation. You get to be a shareholder of a

company if you buy stocks listed in the Philippine Stocks Exchange (PSE).

2. Stocks offer the most growth potential compared to short-term bonds or other

investments. The rates are higher than the rates that most banks offer on an annual basis.

So, if you’re doing it long-term, your money grows for long-term.

BEST BLUE-CHIPS STOCKS IN PHILIPPINES 2019

1. Ayala Corp. (Conglomerates)

2. Ayala Land, Inc. (Property)

3. Aboitiz Power Corp. (Power)

4. Banco De Oro (Bank)

5. Bank of the Philippine Islands (Bank)

6. Int’l Container Terminal Services (Port Operations)

7. Metropolitan Bank & Trust Company / Metrobank (Bank)

8. Metro Pacific Investments (Infrastructure)

9. SM Investments Corp. (Conglomerates)

10. SM Prime Holdings (Property)

11. TEL PLDT (Telecom)

12. Universal Robina Corp. (Consumer)

Best Philippine Stocks for Long-Term Investment

1. Ayala Corp. (AC)

2. Ayala Land, Inc. (ALI)

3. Aboitiz Power Corp. (AP)

4. Banco De Oro (BDO)

5. Bank of Philippine Islands (BPI)

6. DMCI Holdings, Inc. (DMC)

7. PNOC Energy Development Corp. (EDC)

8. First Metro Phil. Equity ETF (FMETF)

9. GT Capital Holdings (GTCAP)

20 PHILIPPINE STOCKS WITH THE HIGHEST 5-YEAR DIVIDEND YIELD AS OF

2018
Stocks to Watch: Fruitas, ripe to pick?

MANILA, Philippines – Food and beverage kiosk operator Fruitas Holdings is listing on the

main board of the Philippine Stock Exchange (PSE) on Friday, November 29.

History: The company started from a single kiosk in SM Manila back in 2002.

After 17 years, Fruitas boasts 1,036 stores across the country, with new kiosks recently opened in

Metro Manila and key provinces like Cavite, Laguna, Rizal, Bulacan, Tarlac, Zambales, Cebu,

Iloilo, Aklan, Davao, and Cagayan de Oro.

Brands. Aside from fruit shakes like Fruitas and coconut beverages under Buko ni Fruitas, here

are some more of the company's brands:

 De Original Jamaican Pattie

 Johnn Lemon

 Sabroso Lechon

 Juice Avenue

 Black Pearl

It is also the company behind lifestyle food parks Le Village and Uno Cinquenta in Quezon City.

Its initial public offering (IPO) was priced at P1.68 apiece and was "well-received by retail and

institutional investors, resulting in an oversubscription of the offering," according to the

company.

The broker tranche was more than 2.5 times oversubscribed, while the local small investor

tranche was a record amount for a Philippine IPO. The exceptional performance and positive

response from the market prove that the public believes in Fruitas' strong fundamentals and

aggressive expansion plans in the country," said Daniel Camacho, executive vice president

of First Metro Investment Corporation.

Proceeds from the IPO will finance the company's store network expansion and the improvement

of existing stores.

The IPO will also pave the way for the introduction of new concepts as well as acquisition of

future brands, commissary expansion, and debt repayment.

How are its financials? In 2018, Fruitas reported P1.6 billion in consolidated revenues, a 37%

increase from P1.15 billion in 2017, driven by network expansion and strong performance of its

stores.

Fruitas earlier said it expects consolidated revenues of P2 billion in 2019, amid a favorable

economic environment and more opportunities for expansion. 

MORTGAGE MARKET

What is a mortgage?

 Mortgages are also known as "liens against property" or "claims on property."

 A mortgage is a legal agreement by which a bank or other creditor lends money at

interest in exchange for taking title of the debtor's property, with the condition that the

conveyance of title becomes void upon the payment of the debt.

 A mortgage is a debt instrument, secured by the collateral of specified real estate

property, that the borrower is obliged to pay back with a predetermined set of payments.

Primary Mortgage Market

 The primary mortgage market is the market where borrowers can obtain a mortgage loan

from a primary lender. Banks, mortgage brokers, mortgage bankers, and credit unions are

all primary lenders and are part of the primary mortgage market.
   Market where borrowers and mortgage originators meet and negotiate to create a

mortgage loan. It is where loans are originated.

Originators

Mortgage Broker

 is an intermediary who brings mortgage borrowers and mortgage lenders together, but

does not use their own funds to originate mortgages. 

Mortgage Bankers

 is a company, individual, or institution that originates mortgages

 use their own funds, or funds borrowed from a warehouse lender, to fund mortgages.

Banks

 is a financial institution licensed to receive deposits and make loans. Banks may also

provide financial services, such as wealth management, currency exchange, and safe

deposit boxes 

Credit Union

  is a type of financial cooperative that provides traditional banking services. 

Some Banks and Brokers that Offer Mortgage in the Philippines

 Metrobank offer some home loans to foreigners depending on their visa category

 BPI bank can give mortgage loans to expats who have the right visa type, or who are

married to a Filipino

 BDO is the largest bank in the Philippines, and has products which are offered to expats

depending on their personal circumstances

  RCBC bank has mortgage products which are suited to foreigners with the relevant visas

and paperwork

 Loansolutions.ph are brokers working across all loan types, for both local and foreign

clients

Secondary Mortgage Market

 The Secondary Mortgage Market is where home loans and servicing rights are bought

and sold between lenders and investors. 

 A large percentage of newly originated mortgages are sold by their originators into

the secondary market, where they are packaged into mortgage-backed securities and

sold to investors. 

 In the US, Fannie Mae and Freddie Mac were created by Congress, it buys mortgages

from lenders and either hold these mortgages in their portfolios or package the loans into

mortgage-backed securities (MBS) that may be sold.

 Fannie Mae and Freddie Mac created a liquid secondary market for mortgages. This

meant that financial institutions no longer had to hold onto the mortgages they originated.

They could sell mortgages on the secondary market shortly after origination. Selling

mortgages freed up funds for creating additional mortgages.

Secondary Mortgage market in the Philippines

National Home Mortgage Finance Corporation (NHMFC)

 In the Philippines, the National Home Mortgage Corporation (NHMFC) was established

with the same intent as the US Fannie Mae and Freddie Mac.
 In 1977, the National Home Mortgage Finance Corporation (NHMFC) was created to

develop and provide for a secondary market for home mortgages granted by public and/or

private home financing institutions. 

FOREIGN EXCHANGE MARKET (FOREX MARKET)

The foreign exchange market is a decentralized worldwide market in which currencies are

traded. It was one of the original financial intermediaries that were created to facilitate the ever-

growing flow of money derived from international trade. Despite all the mass media’s attention

on the stonk exchange, the FOREX market is actually the world’s largest financial market, with a

daily market volume of US$5 trillion.

Aside from facilitating the buying, selling, and exchanging of currencies, it also enables currency

conversion for international trade settlements. Currencies are commonly traded by pairs. A

currency pair is a price quote of the exchange rate for two different currencies traded in FX

markets. When an order is placed for a currency pair, the first listed currency or base currency is

bought while the second listed currency in a currency pair or quote currency is sold.

The Philippine FOREX Market: Illegal?

In the Philippines, however, FOREX trading is illegal. According to the advisory from the SEC

dated 30th of October of the year 2018: FOREIGN EXCHANGE TRADING IS ILLEGAL IN

THE PHILIPPINES. They added that the public is advised to STOP engaging in FOREX and to

STOP investing in foreign-registered investment platforms of commodity futures, contracts for

difference, indices, binary options and the like. The SEC also advises that persons acting as

brokers, or sales agents of these securities are unregistered and unlicensed, and therefore are to

be ignored by the public.

This advisory stemmed out of the complaints from numerous investors that they lose a lot of

money, mainly due to entities who acted as brokers and sales agents, most of whom were phony.
By means of deceptive advertising, high-pressure sales tactics, and unethical marketing tactics,

these phony brokers and agents have taken advantage of interested traders.

Nevertheless, according to an expert in trading FOREX Market online, it isn’t totally illegal to

engage in the market. People can study and analyze currency movements without repercussion.

If a trader had a trading account open before this advisory, they are safe to continue engaging in

the market. In fact, The FOREX Market in the Philippines is more on being subject under

regulations of the BSP and the Securities and Exchange Commission (SEC).

Risks of FOREX Trading

It is common to hear that in forex, 90-95% of the traders lose money when engaging in the

market. There is a study by Financemagnates that sampled 30 forex brokers to check win-rate

percentage, which showed a result of 76% of the subjects losing money.

This doesn’t mean that one cannot be successful in FOREX trading. With enough understanding

of the FOREX markets and how they work, mixed with analysis of international trade, one can

be successful in it. If a trader has these skills, and also choose reliable brokers to work with, he

can come up with greater strategies that yield great results.

A great tip for FOREX traders is to choose trustworthy brokers, to avoid getting ripped-off.

Here’s a list of top-rated brokers, which are regulated by the BSP:

References:

 www.equilyst.com/informational/20-philippine-stocks-with-the-highest-5-year-dividend-

yield-as-of-2018/

 https://www.bdo.com.ph/bdonomura/how-investing-philippines

 www.equilyst.com/informational/20-philippine-stocks-with-the-highest-5-year-dividend-

yield-as-of-2018/

 https://fitzvillafuerte.com/philippine-stocks-buy-long-term-investment.html

 https://dailypik.com/best-blue-chip-stocks-in-the-philippines/

 https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/stock-

market/

 https://www.rappler.com/business/245988-fruitas-stocks-to-watch-november-29-2019

 https://www.investopedia.com/terms/p/primary_mortgage_market.asp

 https://www.investopedia.com/terms/s/secondary_mortgage_market.asp

 https://study.com/academy/lesson/primary-vs-secondary-mortgage-markets-definition-

differences.html

 http://www.eandhrealty.com/faqs/The-mortgage-market-and-how-it-works

 https://www.imoney.ph/housing-loan

 https://www.bworldonline.com/four-decades-providing-liquidity-stability/

 https://www.fhfa.gov/SupervisionRegulation/FannieMaeandFreddieMac/Pages/About-

Fannie-Mae---Freddie-Mac.aspx

 https://www.bbva.com/en/foreign-currency-market-work/

 https://www.investopedia.com/terms/forex/f/foreign-exchange-markets.asp

 http://www.sec.gov.ph/foreign-exchange-trading-is-illegal-in-the-philippines/
 https://www.forexclubasia.com/announcements/2019-forex-trading-in-the-philippines-

what-is-legal-what-is-not/

 https://www.manilatimes.net/2018/12/30/news/latest-stories/breakingnews/how-real-and-

profitable-is-forex-trading/489294/489294

 https://www.topratedforexbrokers.com/bsp-regulated/