History of Philippine Stock Exchange
Lim was the first
The Philippine Stock Exchange first appeared in 1993, but
its history runs much longer. The exchange was a merger
of the Manila Stock Exchange and the Makati Stock
Exchange, which created a single exchange in the
Philippines. The merger also served as a symbol to a
country that had seen its share of political divisions that
the nation could act in a singular direction.
MANILA STOCK EXCHANGE
- The Manila Stock Exchange was founded Aug. 8, 1927, by
five U.S. businessmen. It was in the Insular Life Building on
Plaza Cervantes, Binondo. Founders are W.P.G. Elliot, W.
Eric Little, Gordon W. Mackay, John J. Russell and Frank W.
Wakefield said that they wanted a stock exchange that
would serve the public, practice ethical standards, and
uphold good business practices.
- They also claimed that trading in stocks would stimulate
the Philippine’s economy. The Manila Stock Exchange
moved to Pasig in 1992.
MAKATI STOCK EXCHANGE
- The younger Makati Stock Exchange was founded May
27, 1963. It, too, had five founding members: Miguel
Campos, Bernard Gaberman, Aristeo Lat, Eduardo Ortigas
and Hermenegildo B. Reyes. Because the Philippines
already had an operating stock exchange, there was
opposition to a second one. The exchange, which was in
the Insular Life Building in Makati, did not begin operating
until Nov. 16, 1965.
- In 1971, it moved to its own building on Ayala Avenue in
Makati.
COMPETITION
- Though the Philippines had two stock exchanges, they
both traded the same stocks. They were duplicating
efforts, but they had different policies, different members,
and different stock prices.
- It soon became evident that the country needed only a
single stock exchange.
UNIFICATION
- Philippine President Fidel Ramos led the effort to unite
the two exchanges as one. The Philippine Stock Exchange
was founded July 14, 1992, and by Dec. 23, both the
Makati and the Manila exchanges agreed to become part
of it.
PHILIPPINE STOCK EXCHANGE
- The first board of governors for the Philippine Stock
Exchange was elected March 20, 1993. They were the
president of the exchange and 14 member brokers.
- Eduardo de los Angelos was the first president of the
Philippine Stock Exchange and Eduardo C.
chairman of the board.
- Just short of a year later, the Securities and Exchange
Commission granted the stock exchange its license to
operate as a securities exchange. The licenses for the
Manila and Makati exchanges were canceled at the same
time.
- The Philippine Stock Exchange has made improvements
in its goal to become a premiere exchange. It became a
member of the Association of National Numbering
Agencies in 1995. In 1998, the Securities and Exchange
Commission made the Philippine Stock Exchange a self-
regulatory organization, which allows it to create its own
rules and impose penalties on members.
25 Terminologies in the PSE you should know:
1. Averaging Down: when an investor buys more of a stock
as the price goes down. This makes it so your average
purchase price decreases.
2. Bear Market: This is trading talk for the stock market
being in a down trend, or a period of falling stock prices.
This is the opposite of a bull market.
3. Beta: A measurement of the relationship between the
price of a stock and the movement of the whole market.
4. Blue Chip Stocks: These are the large, industry leading
companies. They offer a stable record of significant
dividend payments and have a reputation of sound fiscal
management.
5. Bull Market: This is when the stock market as a whole is
in a prolonged period of increasing stock prices. Opposite
of a bear market.
6. Broker: A person who buys or sells an investment for
you in exchange for a fee (a commission).
7. Day Trading: The practice of buying and selling within
the same trading day, before the close of the markets on
that day. Traders that participate in day trading are often
called “active traders” or “day traders.”
8. Dividend: this is a portion of a company’s earnings that
is paid to shareholders, or people that own that company’s
stock, on a quarterly or annual basis.
9. Exchange: An exchange is a place in which different
investments are traded. The most well- known in the
Philippines is the Philippine Stock exchange.
10. Execution: When an order to buy or sell has been
completed.
11. Hedge: This is used to limit your losses. You can do this
by taking an offsetting position
12. Index: An index is a benchmark which is used as a
reference marker for traders and portfolio managers.
13. Initial Public Offering (IPO): The first sale or offering of
a stock by a company to the public, rather than just being
owned by private or inside investors.
14. Margin: A margin account lets a person borrow money
(take out a loan essentially) from a broker

to purchase an investment. The difference between the

amount of the loan, and the price of the securities, is
called the margin.
15. Moving Average: A stock’s average price-per-share
during a specific period of time.
16. Order: An investor’s bid to buy or sell a certain amount
of stock or option contracts. You have to put an order in to
buy or sell 100 shares of stock.
17. Portfolio: A collection of investments owned by an
investor.
18. Quote: Information on a stock’s latest trading price.
This is sometimes delayed by 20 minutes unless you are
using an actual broker trading platform.
19. Rally: A rapid increase in the general price level of the
market or of the price of a stock.
20. Sector: A group of stocks that are in the same business.

21. Spread: This is the difference between the bid and the

ask prices of a stock, or the amount someone is willing to
buy it, and someone is willing to sell it.
22. Stock Symbol: A one-character to three-character,
alphabetic root symbol, which represents a publically
traded company on a stock exchange. Apple’s stock
symbol is AAPL.
23. Volatility: This refers to the price movements of a stock
or the stock market as a whole. Highly volatile stocks are
ones with extreme daily up and down movements and
wide intraday trading ranges. This is often common with
stocks that are thinly traded or have low trading volumes.
24. Volume: The number of shares of stock traded during a
particular time period, normally measured in average daily
trading volume.
25. Yield: This usually refers to the measure of the return
on an investment that is received from the payment of a
dividend. This is determined by dividing the annual
dividend amount by the price paid for the stock.