DE LA SALLE UNIVERSITY — DASMARINAS COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY ACCOUNTANCY DEPARTMENT Local Investment Portfolio Using Investagram Platform Submitted By: Balaceg, Emerson Bautista, Zenrex Lein lrabagon, Jessica Lanto, Danarose Lomibao, Christella BSA23/BSM22 ‘Submitted To: Ms. Julie Ann Mateo1. Company Profiles Our investment portfolio includes three companies—Globe Telecom, Inc., Manila Electric Company and Ayala Corporation. Below are each company's details and information. A. Globe Telecom, Inc. Globe Telecom, Inc, is a provider of telecommunications services, The Company operates mobile, fixed line and broadband networks and provides communications services to individual customers, small and medium-sized businesses, and corporate and enterprise clients. There are around 240 Globe stores nationwide. The company headquarters is located at The Globe Tower, Bonifacio Global City, Taguig City, Metro Manila, Philippines. Strengths ‘+ Their Go To Market Track Record is a highly productive record in introducing new products in the domestic market and to various markets ‘+ It built relationships with partners that utilizes each other's technology innovations to enhance service quality + It utilizes globalization to achieve wider customer scope and coverage of operations to increase profitability. ‘+ They have gained a large variety of patents and copyrights through invention and buying rights. ‘+ They have good financial statements that will help them to invest in new ventures. Weaknesses ‘+ There is a poor signal reception which generates customer complaints about the ‘company. ‘+ Ithas poor customer service that leads to loss due to reducing number of consumers. + There is lack of adaptation with the latest technology which does not keep the business in the market trend. Income Statement and Statement of Financial Position ‘Source: Thompson Reuters EonB. Manila Electric Company Manila Electric Company (MERALCO) is an electric distribution utility. The company operates through two segments: power and other services. The Power segment consists of electricity distribution, power generation and retail electricity suppliers (RES). The other services segment is involved principally in electricity-related services. It constructs, operates, and maintains the electric distribution system in the cities and municipalities of Bulacan, Cavite, Metro Manila and Rizal and certain cities, municipalities and barangays in the provinces of Batangas, Laguna, Pampanga and Quezon. Strengths ‘+ Its quality systems are accredited under ISO certifications, ‘+ _Itis one of the most profitable of the Lopez group of companies. ‘+ After its long experience and satisfactory performance, the number of consumers continue to increase, resulting in an increase in the profitability of the company. Weaknesses ‘+ There are unwanted charges that lead to customer complaints and negative feedback on the company, ©. Ayala Corporation ‘Ayala Corporation is a holding company that offers business process outsourcing (BPO) services, transport infrastructure, education, healthcare, international and others. With headquarters in Makati City and operations mainly in the Philippines, it continues to grow its regional and global footprint, serving millions of customers across all market segments. Strengths + Ithas a robust domestic market which gives strong financial growth and profitability,‘+ _Itis one of the most recognized brands in the domestic market that can easily attract, new consumers and to reach the business's target market to ensure easy accessibility. ‘+ High quality products and services which increases brand loyalty and the company’s performane in competitive market. ‘+ There is well-developed integrated IT infrastructure which can improve operational efficiency and increase knowledge of the latest market trends, Weaknesses ‘+The poor customer service which can trigger the negative feedback about the business and affect its growth. ‘+ Lack of organizational commitment and high employee turnover that can increase the recruitment costs and affect the organizational productivity. ‘+ Poor project management practices internally weaken the ability of the organization to successfully open new branches expand the product line Income Statement and Statement of Financial Position ‘Sourée:" Thompson Reuters Eikon I Data on Investment Portfolio This section includes each company's 52-week high, 52-week low, P/E ratio, Volume and Beta. The data presented are as of May 31, 2020. Company sawenk | Saweek [pre ratio | oyamiey | eta PSETGLO_| Globe Telecom re 730800750000 | waar [aet7ke | O70 PSE MER | Mania Electio Company 1 381,00 168,70 | 1620 S03.77K | 0.85 PSE'AC | Ayala Corporation [990-50 [360.00 | 1429 | 643.17K | 1.271 IIL, Trading History This section includes each company's current price at the close of each during the duration of the activity, detailed record of transactions and description of current events.A. Current price at the close of each week GLOBE TELECOM, INC. Oe od UTB. Detailed record of transaction Date Stock | Action | Quantity | Price | Fees | Total March1,2020 | PSEALT_| BUY | 200 | 38.90 | 23.57 | 7,803.67 March 1, 2020 | PSE:BDO_| BUY 30 138.00__| 23.02 _| 4,163.02 March 1, 2020 | PSE.CEB BUY 30 73.00) 22.73 | 2,212.73 March 1, 2020 | PSE:FDC BUY 200 12 22.76_| 2,422.76 March 1, 2020 | PSEFRUIT | BUY 2000 7.64 22.89 | 3,302.89 | March 1, 2020 | PSE:JFC BUY 20 76.90 22.91 | 3,420.91 | March 1,2020 | PSEMWC | BUY 300 11.54 [22.92 | 3,484.92 | March 1,2020 PSE SECB | BUY 30 75460 [23.10 | 4,661.10] March, 2020 | PSE:GLO_| BUY 25 7,778.00 | 131.13 _| 44,581.13 | March 1, 2020 | PSE‘NIKL BUY, 2000 244 73.04 | 4,303.04 | ‘March 1, 2020___ PSE:BPI BUY 10 74.10 2251 | 763.51 _| March 2, 2020_|_PSE:ALI SELL 200 40.20 71.96 | 7,968.04 _| March 2, 2020_| PSE:FRUIT | SELL 1000 1.74 33.10 _| 1,706.90 March 2, 2020 | PSE-BPI SELL 10 77.00) 27.44_| 742.86 March 2, 2020 | PSE:MWC_| SELL 200 12.08 37.26 _| 2,738.74 March 2, 2020 | PSE.SECB | SELL 20 160.00_| 4208 | 3,167.92 March 2, 2020 | PSE:MWC | SELL 100 12.16 29.88 | 1,186.12 March 3,2020 | PSEFB BUY 30 71.45, 22.72 _| 2,166.22 March 3,2020 | PSEPGOLD| BUY | 200 | 96.35 | 23.49 | 7,203.49 March 3,2020 | PSE:CEB | SELL 10 75.55, 27.05 | 728.45 March 3,2020 | PSE:FRUIT | SELL 71000 1.75 33.16 | 1,716.84 March 3,2020 | PSE:MEG | BUY 1000 3.50 22.93 | 3,522.93 March 3, 2020 | PSE:;GLO | SELL 15 7,841.00 | 247.15 _| 27,367.85 March 3, 2020 | PSE:PIZZA BUY 200 8.05 22.64 1,632.64 | ‘March 3,2020 | PSEFDG |BUY 300 11.98 | 22.94 | 3,616.94 | March 4, 2020 | _PSEJFC | SELL 10 175.00 | 33.16_| 1,716.84 | March 4, 2020 | PSE:AC BUY 30 662.50 58.63 | 19,933.63 | March 5,2020_| PSE\BDO | SELL 20 14150__| 39.80 | 2,790.20 | March 5,2020_| PSE:MER | BUY 30 265.20 | 23.59 | 7,979.59 | March 5,2020_|_ PSE:EEI BUY 200 7.50 22.63_| 1,522.63 | March, 2020 | PSE:\NIKL_| SELL 2000 7.94 46.26 | 3,833.74 _| March 9, 2020 | PSE:LBC_| BUY 100 11.54 2257 | 1,176.57_| March9, 2020 | PSE:BDO | SELL 10 14150_| 31.10 | 1,383.90 March 13, 2020 | PSE:FB SELL 30 62.20 33.88_| 1,832.12 March 13, 2020 | PSE:PGOLD | SELL 200 32.55 62.44 | 6,407.56 March 13,2020 | PSEFDC | SELL | 500 | 10.00__| 63.15 | 4,946.85 May 10,2020_| PSEPIZZA | SELL | 200 | 6.54 | 3044 | 1,277.56 May 19, 2020_|_ PSE:EEI SELL 200 4.99 28.54 | 969.46 May 20,2020 | PSE:MEG | SELL 1000 2.56 38.14 | 2.52186 May 20,2020 | PSE:CEB | SELL 20 39.65 27.28 | 765.72 May 22,2020 | PSE-BDO | SELL 10 90.90 | 27.89 | 887.01 | May 29, 2020_| _PSEJFC | SELL 10 11780 | 29.64 | 1,148.36C. Current events and economic environment that could affect investment decision. SE Asia Stocks-Philippines gains most as Duterte apology boosts Ayala, Metro Pacific 5 May 2020 Most Southeast Asian stock markets closed higher with Philippines gaining the most after President Rodrigo Duterte apologized for his "hurting words" about two tycoons associated with some of the biggest companies in the country. President Duterte apologized to the Ayala family, the owners of Ayala Corp, and to Manuel Pangilinan, the CEO of Metro Pacific Company, offering an olive branch to settle a costly regulatory row. Shares of Ayala Corp and Metro Pacific Investments Corp surged 14.7% and 13.6%, respectively, helping the Philippine benchmark end 1,8% higher after gaining as much as 2.4% earlier in the session, the most since April 17. (Nikhil, 2020) SE Asia Stocks-Philippines recovers on hopes of lockdown easing May 7, 2020 Philippine shares reversed course to end higher on hopes the country would soon ease its coronavirus-driven restrictions. The Philippine benchmark gained 0.3%, recovering from a 0.7% fall earlier in the session after reporting an unexpected slowdown in first-quarter economic growth as the coronavirus pushes the economy towards a recession. "Investors brushed off the contraction in Q1 GDP with a possibilty that the country may ease the lockdown after May 15 as mentioned by the administration," said Luis Limlingan, managing director at Manila-based brokerage firm Regina Capital Development Corp. After eight weeks of one of the world's strictest community quarantines, Manila is set to reopen its economy at the end of next week (Pranav, 2020) Initial Covid-19 vaccine results boost stocks, peso May 18, 2020 Reports about the positive initial results of the coronavirus disease 2019 (Covid-19) drug being developed by biotechnology firm, Modema, and the call by the Federal Reserve for more policy support lifted sentiments in the Philippines’ financial market Tuesday. After a two-day slide, the Philippine Stock Exchange index (PSEi) recovered and rose by 1.40 percent, or 76.50 points, to 5,555.85 points, All shares increased by 1.03 percent, or 34.32 points, to 3,359.82 points. Holding firm counter jumped the highest at 2.26 percent, and was trailed by the Services, 1.65 percent; Financials, 1.23 percent; Property, 0.42 percent, and Industrial, 0.03 percent. Luis Limtingan, Regina Capital Development Corporation head of sales, said markets also took note of Fed Chair Jerome Powell's statement calling for additional policy measures on the back of the projection that economic recovery from the pandemic will take some time. Other positive developments that benefited the market Tuesday include China's announcement that demand for oil is back to normal and the news that Germany is considering lifting the international travel ban (Villanueva, 2020)IV. Recommendation Stock trading is not an easy task. It always bears risk, Hence, it requires strategy, patience, and critical skills. Our group did a lot of mistakes in the start while trying to figure out how it works. These mistakes include investing without proper research and selling at low prices. We chose companies based on how well-known they are. We mindlessly bought shares at their high and sold at their low. The lack of knowledge about trading led us to great losses. Fortunately, we were able to learn through class discussions and online resources. With the help of those, we came up with our investment portfolio. In making our investment portfolio, we had to sell stocks that are not profitable to us. As shown in our detailed record of transactions, we bought and eventually sold stocks from companies like BDO Unibank, Inc., Cebu Air, Inc, EEI Corporation, and Shakey's Pizza Asia Ventures, Inc., mainly because their short-term trend and medium-term trend are both downward. After observing these stocks for months, we decided to sell them to cut losses Although low-risk, we sold Megaworld Corporation's stocks because it is downtrend at that time and its value is near to its 52-weeks low. On the last day of trading activity, we also sold the Jollibee Foods Corporation stocks for the same reason as Megaworld Corporation. By doing these things, we were able to make profit with our investment portfolio after months of having loss. Our investment portfolio consists of Globe Telecom, Inc., Manila Electric Company, and ‘Ayala Corporation. We chose to retain these investments due to various reasons. One of those reasons is that these investments come from different subsectors and form a diversified investment portfolio. Globe Telecom, Inc is under the Telecommunications sector; Manila Electric Company is under Electricity, Energy, Power and Water sector and; Ayala Corporation is under the Holding Firms sector, We used to have investments on Filinvest and Manila Water company. However, we found them under the same sectors as Manila Electric Company and ‘Ayala Corporation. By creating a diversified investment portfolio, we were able to reduce the risks. Diversification help to protect an investor's capital in the event that one segment of the financial markets or industry does not perform well. It strives to smooth out unsystematic risk events in a portfolio, so the positive performance of some investments neutralizes the negative performance of others. (Segal, 2020) To further discuss the reasons on retaining the company's stocks, each company in the portfolio will be discussed one-by-one. Globe Telecom, Inc. is among the three listed companies in the Philippine Stock Exchange under the telecommunications subsector. In the midst of the COVID-19 pandemic, many companies from different subsector were immobilized and affected negatively due to community quarantine and lockdowns. However, it is not the case in the telecommunication subsector. This subsector plays a crucial role in maintaining the economic and social stability of our country. As the government impose restriction on movement, people were becoming dependent on network services to communicate, work at home, do leisure activities, and be updated on news.‘Among the other two listed companies, the Globe Telecom's main competitor is PLDT. In terms of earnings per share, Globe Telecom, Inc. has better EPS of 161.76 compared to 100.49 of PLDT. A higher EPS indicates higher profitability. Comparing their trends, the trend of PLDT is sideways while Globe is uptrend both on short-term and medium-term, Given these, Globe Telecom, Inc. is a better choice, Looking at the current price every close of the week, its price value is increasing. Its beta of 0.729 indicates that the price is less volatile than the market. A beta less than 1.0 shows a stock with lower volatility and low-beta stocks pose less risk,(Mcolure, 2020) Aside from the Telecommunications subsector, the Electricity, Energy, Power and Water subsector also plays an important role in this pandemic, As the effects of COVID-19 ripple across the globe, this subsector is a necessity and great help in all aspect. It is proactive in giving utilities to households, manufacturers of food and medicine, and hospitals. Many power, Utilities and renewables (PU&R) companies are now focused on keeping their assets online and providing safe reliable supplies of electricity. Because of lockdowns, there has been a decrease in the industrial demand and an increase on residential customer demands. (Requejo, 2020) Manila Electric Company (MERALCO) is one of the listed companies under the Electricity, Energy, Power and Water subsector. We retained its stocks in our investment Portfolio, firstly, for the reason of being the Philippines’ largest distribution utility company and a necessity in this pandemic, Based on the company locations, there are still opportunities of expansion. It is good indicator that company can have further growth that would lead on increased profits and stock prices. MERALCO has 0.65 beta which indicates that its stocks have lower volatility. Like Globe Telecom, Inc., it also poses less risk. Both the short-term and medium-term trends are uptrend. As observed in the graph above, MERALCO’s current prices at the end of each week are increasing, In addition, it has the highest return on equity of 23.05% among all other companies that belongs to the same subsector it is in. In the midst of pandemic, Ayala Corporation was among the companies that were greatly affected. Its close price on March 20, 2020 was 410 and was indeed below the support However, we chose to retain it after seeing progress on the following weeks, When President Rodrigo Duterte apologized, shares of Ayala Corporation surged 14.7%. Because of that current event, we expected that prices will go up. We became firmer on our decision to retain it. As seen in the current price at the end of each week, the price indeed increased. It did not fail our expectations. Another reason for retaining Ayala Corporation's stocks is the current event of initial COVID-19 vaccine. Through it, all shares increased by 1.03 percent, or 34.32 points, to 3,359.82 points and holding firms sector jumped the highest at 2.26 percent. Ayala Corporation, being a holding firm company, increased as well. The short-term and medium-term trends both became uptrend. The 1.271 beta of Ayala Corporation indicates high volatility. Although it is riskier, we still chose to retain it because high beta stocks provide higher return potential. In general, high beta means high risk, but also offers the possibility of high returns if the stock turns out to be a good investment. (Streissguth, 2019) Also, there are already two low risk stocks in our portfolio that could mitigate the losses it could create. Given that this activity is virtual trading, we chose to continue the investment. Since our strategy is also applicable to long term, we would like to see if this investment portfolio wouldprosper in the future. Also, we would like to continuously learn about stock trading, If this is real life and involves real money, we would stil continue the investment until we reach our target profit. Our exit strategies would be the use of Support and Resistance. In order to execute it, we would place stop-loss orders and take-profit orders. In stop-loss, a stop is an instruction for us to buy or sell an asset when the asset price reaches the point of loss we have indicated, To do that, we would set our stop-loss orders slightly below support and slightly above the resistance ‘When the stop-loss is triggered, it will automatically turn into a market order, helping to minimize losses if the price moves against us quickly, To finally exit, take profit strategy will be used, We will establish price targets where we are willing to leave. Like a stop-loss, a take-profit converts into a market order when triggered.V. References Thomson Reuters Eikon. (2020) Manila Electric Company Retrieved from https://apact apps.cp.thomsonreuters,comiveb/Apps/Corp?s=MER.PS&st=RIC&app=true Thomson Reuters Eikon. (2020) Globe Telecom, Inc. Retrieved from https://apact apps.cp.thomsonreuters, com|web/Explorer/Default aspx?s=GLO.PS&st=RIC Thomson Reuters ikon. (2020) Ayala_-—Corporation. Retrieved from https://apact.apps.cp.thomsonreuters.comiveb/Apps/Corp?s=AC. PS&st=RIC&app=true Ayala Corporation (2020) Portfolio. Retrieved from https:/Mwww.ayala.com.phiinvestors/portfalio. Subba, N. (2020) SE Asia Stocks-Philippines gains most as Duterte apology boosts Ayala, Metro Pacific. Retrieved from _https://ph.news yahoo. com/se-asia-stocks-philippines-gains- 103920639.,html Globe Telecom, Inc. (2020) Integrated Report 2018. https://www. globe. com. ph/content/damiglobe/brie/About-us/sustainability/documents/GLO- Integrated-Report-2018-Final-2.pdf Pranav, A(2020) SE Asia Stocks-Philippines recovers on hopes of lockdown easing Retrieved from https://ph. news yahoo. com/se-asia-stocks-philippines-recovers-104751001 htm! Villanueva, J. (2020) Initial Covid-19 vaccine results boost stocks, peso. Retrieved from https:/www.pna.gov phiarticles/1103350 Segal, T. (2020) Diversification. Retrieved from https:/www.investopedia.com/terms/didiversification. asp Mcclure, B. (2020) What Beta Means When Considering a Stock’s Risk https:/www.investopedia.com/investing/beta-know- risk/#t:~:text=Beta%20is%20a%20measure%20of,has%20a%20beta%20above%201 0. Requejo, F.(2020)Understanding the sector impact of COVID-19. Retrieved from https:/www2. deloitte. com/global/en/profilesifelipe-requejo. html Streissguth, T. (2019) Is a Negative Beta Coefficient More Risky Than a Positive in the Stock Market. Retrieved from https:/finance.zacks.com/negative-beta-coefficient-risky-positive-stock- market-7596.html