Stock Market

What is the name of the stock market in the Philippines?

Filipino: Pamilihang Sapi ng Pilipinas; PSE: PSE) is the national stock exchange of the

Philippines. The exchange was created in 1992 from the merger of the Manila Stock Exchange
and the Makati Stock Exchange. Including previous forms, the exchange has been in operation
since 1927.
History:
On February 3, 1936, the Securities and Exchange Commission announced that it had
"relinquished control of the Manila Stock Exchange."[5]
The Philippine Stock Exchange was formed on December 23, 1992 from the merger of
the Manila Stock Exchange (MSE) (established on August 12, 1927, based on Muelle de la
Industria, Binondo, Manila) and the Makati Stock Exchange (MkSE) (established on May 15,
1963, based in the Makati Central Business District, within Ayala Tower One). Both exchanges
traded the same stocks of the same companies.
In June 1998, the Securities and Exchange Commission (SEC) granted the PSE a "Self-
Regulatory Organization" (SRO) status, which meant that the bourse can implement its own
rules and establish penalties on erring trading participants (TPs) and listed companies.
In 2001, the PSE was transformed from a non-profit, non-stock, member-governed organization
into a shareholder-based, revenue-earning corporation headed by a president and a board of
directors and on December 15, 2003 listed its own shares on the exchange (traded under the
ticker symbol PSE).
On January 4, 1993, the former Manila Stock Exchange started the computerization of its
operations using the Stratus Trading System (STS) with a company called Equicom. On June 15,
the former Makati Stock Exchange adopted the MakTrade trading system. Both systems were
linked on March 25, 1994 to produce a One Price-One Market exchange. Two years later, on
November 13, 1995, the implementation of the Unified Trading System (UTS) allowed the use
of a single-order-book system on a MakTrade software where all the orders are posted and
matched in one computer.
How to Invest in the Stock Market in the Philippines
Did you know for as low as P1,000 “every Juan” can start investing in the stock market?
Why invest in the stock market?

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).
Let’s say you buy stocks from Jollibee, MegaWorld, and SM Investment Corp. You become a
shareholder of those companies. In other words, you become a co-owner of the company. So,
why invest? As the company grows, then your shares also grow and receive profits. But if they
experience losses, you experience them, too.

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.

For example, the gross interest rate per annum from banks today ranges from 0.10% to 0.20% as
of 2019. If you deposit your money let’s stay in LandBank as ATM Savings, you get:

Minimum Initial Deposit PHP 500.00

 Minimum MADB Requirement PHP 500.00

Minimum Balance to Earn Interest PHP 2,000.00

Gross Interest Rate Per Annum 0.10%

If you start investing in stocks, you can gain more than that and even have a 30% if you’re into
day to day trading. You can manage to grow your investment portfolio every year at 8%, and for
long-term in stocks.

A safe estimate, though, and of course, better than 0.10%.

Two approaches in investing—short-term vs long-term

Day trading and quick gains (for short-term)

If you want quick gains, you can open an account online on COL Financial. You can start buying
the stocks that you believe in most and trade daily. As a beginner, you’ll have to learn the basics
of technical analysis, get real-time updates on prices. It would be best if you learned the nooks
and crannies of trading.

Buy stocks and diversify the portfolio (for long-term)

Another approach is to study, research, and more research. Research before buying the stocks
from companies you think will do well for the long-term. Let’s say 5 to 10 years from now.

Long-term means you are willing to let your hard-earned money to “sleep” for that long.

The longer you hold them, the better the gains. But again, you need to understand that investing
in the stock market involves risk.

You may want to start buying blue-chip stocks. These stocks have higher liquidity and are easy
to trade. They are not accompanied by high-risks and are considered safe investments compared
to other stocks.

Hint: Think of the basic needs: food, homes, electricity, banks. More on blue-chip companies on
our next blog.
How can you make money in stocks?

1. Capital Appreciation

Each stock has a corresponding price. Capital appreciation happens when the price of your stock
increases. It’s the difference between the price you paid when you both your shared and the
current market price.

For example, if you buy stocks from Company A at P200.00 After three days, the price went up
to P230.00 then your capital appreciation is P30.00. The realised gain of P30.00 only happens
when you sell at P230.00 If you hold it, let’s say after 30 days, then it went up for about 270.00,
your capital gain is P70.00.

If the price decreases, then you sell it at P200.00, you have no gains.

2. Dividends

Corporations issue dividends to shareholders. These dividends represent the earnings of the
company to be shared, either via cash or additional shares of stocks.

How to Invest in the Stock Market

Ready to invest? You can get started in this simplified 4-step processes

There are hundreds of licensed brokers accredited by PSE. You can choose the type of service
you want based on your convenience and preference.

1. Choose your broker

2. Online (COL Financial, First Metro, and Phil Stocks)

The online stock brokers directly communicate with the customers online. Clients execute the
orders, and they have direct access to the market’s information. COLF has been receiving great
reviews as the best and easy to use the online platform as a stockbroker. You can start funding
your account for as low as P1,000.00 as of this writing.

aditional (Use a licensed broker or salesman to handle account)

These are assigned licensed salespeople to handle your account, and they take orders via phone
call.
4. Open your stock market brokerage account

You can avail COL Financial’s entry-level account at P1,000. You can download the forms here.
Fill up the forms and attached with the requirements and send them over via mail. If you want
quick verification of documents and approval, you can drop by at their office in Ortigas.

5. Fund your account

You can fund your account via online banking. Once approved, COL will provide the bank
details so you can fund your account. You’re given a grace period of three months to fund your
account for activation.

You can either fund your account via bank deposit or personally deposit the money to your
broker’s office.

6. Place your order: buy or sell, via online or phone call to your stockbroker

Again before you buy or sell, you may want to read more on the companies you want to buy
stocks from. For starters, you can read The Intelligent Investor by Benjamin
Graham and Increase your Financial I.Q. by Robert Kiyosaki.
For beginners, you can buy stocks on a regular schedule with the same amount of fund. Do this if
you’re going to invest for long-term. It’s the Peso-Cost average where you grow your money in
the long run.

7. Monitor or track your investments

Investing is an ongoing process as you may want to track and monitor the progress of your
stocks. If you choose the online stock brokerage like COL, you can log in to their website. You
can access all the information and data you need.

But wait there’s more!

What are the risks involved in stocks?

In any investments, risks always exist. It’s a matter of how much money are you willing to risk.
Think for long-term gains, instead of instant gratification.

First, you don’t have any control over the prices of stocks in the market. One day you may have
gained 50% from one blue-chip company, and the next day you lose 30% from losses.

Second, prices are always volatile. They can go up and down. There’s the risk of a banking crisis
and recession similar to 2008-2009. Moreover, if this will occur, a massive chance of a global
recession can crash the market.

Third, the markets also experience corrections and crashes.

Last but not least, political and economic concerns may affect the markets. You don’t have
control over the markets. For example, the peso value and stocks rose when President Duterte
claimed his presidential win in May 2016.
 

Investing in stocks is never risk-free. But if you start young and early, you get to enjoy the
growth of your money if you’re going to do it for the long-term. Always stay curious, be a
learner, and explore as much as you can as you invest.

Source: moneysmart.ph