Who Is Who in The Phil Stock Market-1

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?
(WHY WILL YOU INVEST YOUR MONEY IN THEIR COMPANY?)

A paper for MBA in CAPITAL MARKET Submitted by: Mr. Gerry Badillo, Mr. Joel Dela Pena, Ms. Claire Quiray.
INTRODUCTION
Risk comes from not knowing what you are doing! Warren Buffett. Stock picking is the most challenging part in stock market investing. There are just too many strategies to try and so much data and information to understand as well as sophisticated mathematical models to adopt in order to arrive at the right valuation and predict where prices are going.
But once you know the simple ways of selecting stocks, you will discover that brilliance is not an edge in stock market picking or investing. This is simply because, stock market is really just a matter of common sense. Thus, mind-breaking analysis, although impressive, is not always needed in making a good stock appraisal. As, Warren Buffet, the most successful investor of all time, says the simpler the better .
This study will show who is who in the Philippine Stock Market by just looking closely at the lists of top 50 companies ranked in various ways. Through this, you will know that risk in stock market can be managed and anyone can be knowledgeable in picking winners.
For comparative growth analysis, i.e., fundamental growth vs. capital growth, we will use as support data the ranking of the biggest gainers covering a 5-yr period stock price. This is intended to further understand
that the biggest companies do not automatically be the best market performers by capital gains and vice versa.
Profit guide. Investors can profit in the stock market in various ways::

A. Capital Gains - Through stock price appreciation. This is the difference between the buying price
and the selling price.
B. Cash Dividend - Through share in the company profits by way of a cash dividend. The number of
shares held multiplied by the amount of cash dividend declared by the company.
C. Stock Dividend - By way of a stock dividend. This will increase the number of shares held
depending on the percentage declared by the company.
D. Stock Rights - By way of buying stock rights. Stock rights are usually being offered to existing
stockholders at a discount.
Companies which usually do these capital actions are the fundamentally good firms with consistent income record. Finding these stocks is the most challenging pat. Again, the secret is stock selection. But knowing who is who in the stock market is equally important as understanding the equities industry due to various factors that affect share prices. Thus, a good understanding about how the exchange works should be a good start.
PROFILE OF THE PHILIPPINE STOCK MARKET PSE is the lone bourse in the Ticker Philippines (247 securities) Minimum Maximum Average Std. Deviation Sum Market Cap Weighted Average Total Equity LF Market Cap Philippines. It was established in 1927 and is now composed (8,034,920,960.00) 287,829,000,192.00 13,325,605,320.21 32,473,829,746.24 3,184,819,671,530.00 67,303,924,128.12 65,078,500.00 473,101,697,024.00 31,107,018,006.16 68,120,678,015.18 6,812,436,943,348.00 180,283,219,303.24 of 247 listed companies. It is one of the largest in Southeast Asia with a total combined equity of Php3.18 trillion and Php6.81 capitalization. trillion market

Indicators. the PSE use
To track the market performance, gauges like the PSE INDEX or the ALL
PSEi, which is the main index;
SHARES INDEX, which is the broader index and SECTOR INDICES such as Financials Index, the Industrial Index, the Holding Firms index, the Property Index, the Services Index, and the Mining & Oil Index. Computation of indices are based on weighted capitalization.
PSEi Index, is made up of 30 companies (see table above) which are the stocks representative of the six (6) PSE sectors. The index has a base value of
2922.21 as of September 30, 1994. Free-float adjusted as of 4/3/06*New industry classification effective 1/2/2006. Its old name was PSE Composite Index. All SHARES INDEX, on the other hand, includes all
common stocks in its composition, thus, it was called the broader index.
Management The Philippine Stock Exchange or PSE is being managed by a 15-member board. Currently, the incumbent
President is HANS SICAT. At least 51% of the Board members must always remain non-brokers as per the rule set by the Securities Regulation Code. The remaining Board members are broker-directors who represent brokerage firms.

The PSE management are mainly the President/CEO and the Professional managers who oversee the implementation of the Board policies/resolutions and management of PSE activities and operations to ensure that the investing public is protected.
Regulator The Securities and Exchange Commission or SEC oversees the industry but PSE can police its own ranks under its Self Regulatory Organization status or SRO.
PSE Organizational Chart
Trading System.

PSE has adopted a New Trading System for trading execution and an online daily disclosure system to promote transparency among listed companies and to make sure that there is full, fair, timely and accurate disclosure of price sensitive and material information from all listed companies.
Who are the biggest PSE brokers. Be it online or conventional way of trading, investors can only buy an d sell stocks through a broker or Market Participant (MP). Any legal aged person can open a trading account with one or more brokers as they please. Filled up Customer Account Information Form or CAIF, two valid Identifications and trading funds are the basic requirements before a client can start trading.
PSE has 134 MPs, ten (10) of which, are foreign. The complete list can be extracted from www.pse.org.ph. Investors may choose their broker according to their needs. Usually, local brokers are the ones catering for retail accounts while the big ones have local and foreign institutions for clients. measured through the size of their transactions. Brokers size are usually
But whether big or small brokers, their main responsibility is only to execute the transaction of clients.
TOP 2O PSE BROKERS (ranking by peso value for the month of May 2011) RANK F-Foreign; BROKERAGE FIRM % to total L-Local market peso transactions 1 2 3 4 5 6 F F F F F F ATR KIMENG SECURITIES, INC. CREDIT SUISSE SECURITIES (PHILIPPINES), INC. DEUTSCHE REGIS PARTNERS, INC. CLSA PHILIPPINES, INC. MACQUARIE CAPITAL SECURITIES (PHILIPPINES), INC. UBS SECURITIES 11.42 10.94 8.87 6.78 4.92 4.82
FOREIGN BROKERS 11.42 10.94 8.87 6.78 4.92 4.82
LOCAL BROKERS

7 8 9 10 11 12 13 14 15 16 17
F L F F L L L L L L L
18 L 19 F 20 L TOTAL MARKET VALUE
PHILIPPINES INC. PHILIPPINE EQUITY PARTNERS, INC. CITISECONLINE.COM., INC. J. P. MORGAN SECURITIES PHILIPPINES, INC. DBP-DAIWA CAPITAL MARKETS PHILIPPINES, INC. SB EQUITIES, INC. ABACUS SECURITIES CORPORATION BDO SECURITIES, INC. FIRST METRO SECURITIES BROKERAGE CORPORATION PAPA SECURITIES CORPORATION RCBC SECURITIES, INC. BPI SECURITIES CORPORATION WEALTH SECURITIES, INC. DW CAPITAL, INC. BA SECURITIES, INC. 262,275,569,527
4.11 3.85 3.81 3.37 3.25 2.55 2.34 2.04 1.79 1.65 1.61 1.31 1.07 1.04 81.54
4.11 3.85 3.81 3.37 3.25 2.55 2.34 2.04 1.79 1.65 1.61 1.31 1.07 60.11 1.04 21.43
Be it monthly or yearly ranking, the above top twenty brokers are always in the list. Out of 134 brokers, twenty of them accounts for over eighty percent of the total market transaction. Ten of these twenty brokers are foreign while the other half, locals. And with the over eighty percent contribution to the total market turnovers, over sixty percent are foreign money, which comes from only 7% of the PSE membership. These are the biggest names in the Stock Brokerage Industry. Looking at the list closely, you will notice that some of the MPs are also listed companies. Kinds of Trading Stocks
These are the brokers with online trading facility. Investors who want to manage their own accounts employ the services of these brokerage houses. This way of trading is beneficial for investors who are trading, a help from a live person beneficial. will always be

As opposed to online, the conventional way of trading is being done by calling the broker/s to execute trades on behalf of the investor. This kind of trading is called Broker-Assisted.
Listed Companies
The 247 listed companies are classified under the First Board, Second Board or the Small and Medium Enterprises Board which are further segregated into the following sectors: Financial, Industrial, Holding Firms, Property, Services, and Mining and Oil.
Data Limitation Matrix of Top 50 Listed Companies chosen out of the 247 firms are supplied for this study and presented on separate annexes. Data shown included the codes and short names of listed companies, company
description/business models, Key people, Total Equity, Total Market Capitalization, Book Value, PE Ratios, Dividend Yields, Trailing 12mos Net Income, 5-yr closing prices, Relative Strength Index, 52-wk High/Low. Except for the closing prices, other data are for 2011.
Who are the biggest companies in the stock market based on Total Equities
TOP 50 COMPANIES BASED ON TOTAL EQUITIES. This table shows the top 50 most solid companies listed in the Philippine Stock Market based on Total Equity.

Total Equity is also known as book value or net asset value. It is computed as follows: Common equity+Minority interest + Preferred Equity.
Total Equity is what will be left to the owners or stockholders after all the liabilities are paid.
If
total equity is divided by the of outstanding shares,
number
BOOK VALUE PER SHARE will be revealed. usually Book Value per share is being compared to the
Market Value to know if the stock is trading at a discount or at a premium or to know if the stock is cheap or expensive. If a stock is discounted, you are actually getting more than what you are paying for.
Conversely, if the stock is trading at a premium, you are paying more than the value of the share.
If BV is > the MV = the stock is discounted if BV is < the MV = the stock is trading at a premium.

Common sense dictates that, discounted stocks are good picks than those which are trading at a premium. However, factors why the stock is discounted should also be taken into account. If the reason of its low price is due to illiquidity or inactive trading, then this stock is not a good pick after all. Look for the ones which are discounted, actively traded and liquid.

Ticker Short Co. YOUR BUSINESS MODEL (WHY WILL YOU INVEST Name MONEY IN THEIR COMPANY?) 1.SMC Equity PM SAN MIGUEL
HOW THEY MAKE PROFITS AND WHO OWNS & MANAGES THEM (BIGGEST COMPANIES BY EQUITY) KEY PEOPLE
2.SM Equity
PM
SM INVESTMENTS
3.AC Equity
PM
AYALA CORP
4.JGS Equity
PM
JG SUMMIT HLDG
5.MBT Equity
PM
METRO BANK & TR
6.AGI Equity
PM
ALLIANCE GLOBAL
7.FPH Equity
PM
FIRST PHILIP HLD
8.BDO Equity
PM
BANCO DE ORO UNI
San Miguel Corporation, through its subsidiaries, operates food, beverage and packaging businesses. The Company's products include beer, wine and spirits, soft drinks, mineral water, chicken and pork products. San Miguel markets its products both in the domestic and overseas markets. The Company also manufactures glass, metal, plastic, paper and composites packaging products. SM Investments Corporation is an investment holding company. The Company operates retail business and develops shopping mall and other real estate property. The Company also provides tourism services. Ayala Corporation, through its subsidiaries, develops real estate properties. The Company also provides financial services, insurance, and information technology and telecommunications services. In addition, Ayala manufactures and sells passenger cars as well as having operations in the food and agriculture industries. JG Summit Holdings Inc. operates in the consumer foods, agro-industrial and commodity food products, and textiles industries. The Company also invests in real estate, manages hotel, and provides apartment management services. In addition, JG also provides banking and financial services, and invests in telecommunications, petrochemicals, and air transportation businesses. Metropolitan Bank & Trust Company offers commercial and investment banking services. The Bank's business activities include borrowing and lending, trade finance, remittances, treasury, investment banking and savings. Alliance Global Group, Inc. is a holding company with interests in food and beverage, real estate development, and fast food restaurant businesses. The Company distills brandy, manufactures glass containers, distributes wines and snacks, develops planned mixed-use communities, and either operates or sub-franchises hamburger restaurants. First Philippine Holdings Corporation, through its subsidiaries, invests in the energy sector. The Company also operates in the properties, road infrastructure, construction, manufacturing, and securities transfer services. Banco de Oro Unibank, Inc. is a full-service universal bank. The Bank's services include deposits and placements in local and foreign currencies, loans and discounts, trade financing, foreign exchange and securities dealing, trust and investment services, cash management services, investment banking, and insurance products.
Eduardo M. cojuanco Jr.Chairman,Ceo Ramon S. AngPresident,Coo
Henry Sy, Sr.Chairman Teresita T. Sy- Vice Chairman Jaime Augusto Zobel de AyalaChairman, Ceo Fernando Zobel de Ayala- Prsident, Coo
James L. Chairman, Lance GokongweiPresident ,Coo
GoCeo Y.
Dr. George S.K. TyFounder, Chairman Mr. Antonio S. Abacan, Jr.- Vice Chairman, President Andrew L. TanChairman, President Sergio R. OrtizLuis, Jr.Vice Chairman, Director
Federico R. LopezChairman, Ceo Elpidio L. IbanezPresident, Coo Teresita T. SyChairperson Corazon S. dela Paz-Bernardo- Vice Chairperson

Who produces the highest Net Income? A real efficient managers are the ones who produces bigger profits for the company with lesser capital.
Although SMC is biggest by equity, they only ranked second to PLDT which posted the highest net income.
A review on the source of profits should, however, take into consideration. In some
cases, extraordinary income or income from sale of assets inflate the bottom lines figures. Just make sure that income were from the operations and that non-recurring items are noted to make a more balanced analysis.
Dividends There is no rule on giving dividends even the company raked in profits. But this is the
acceptable as long as the company is reverting the income back into the business operation since valuation of its stock will also improve.

Once
noticed
by the
investors,
improved valuation will always trigger a
demand for the shares and this will push the market price. Thus,
even if there is no profits from dividends, there will be income from the capital gains.
Increase price lead will
in
market
eventually
higher market the
capitalization of company.
Who are the biggest listed companies by Market Capitalization
Market capitalization is the measure of corporate size.
Majority of these companies are also in the list of
biggest companies by equity with even bigger amounts of market capitalization.

These figures can be computed by multiplying the market price by the number of shares outstanding. Thus, if the stock is trading at a premium, its market capitalization is also higher compared to its equity. Since market price is vacillating daily or even every minute, market capitalization is also changing depending on the direction of the share price. During bear markets or when prices are down, Market cap is possible to become smaller than the equity.
While Equity is more conservative and solid to use as a measure of stability, size and value, Market Cap is a good measure of stock growth.
Who gives the highest dividend yield?
Yield or dividend yield is the percentage of money or dividend received on investment. This is a measure of how much cash flow you are getting relative to each peso invested in a stock. Intelligent investors choose companies who give the highest yield and compare it from the bank interest rate. Of course the yield should be, the higher, the better.
The diagram below simply explains the dividend yield ranking.
There are some solid companies which are slow on capital gains but consistent and generous on the yields.

Dividend yield is calculated by dividing the ANNUAL DIVIDENDS PER SHARE AGAINST PRICE PER SHARE.
PE RATIO Although PER information will not give you earnings from investment, it will
show you if the stock is overvalued or undervalued. Thus, knowing this, price guide its like having a a the
to be able to buy at near
reasoble price or sell maximum price at the time.
PER if compared with a company from the same industry, it will give you a clearer answer as to which stock is much cheaper or expensive.
PER is the lower the better, but it will be very imprtant to know why the stock price is cheap or why the PER is low. The reason for the low price should not be due to illiquidity.
Moreover, although companies with high PERs can be considered expensive, the quality of the stock must also speak as to why its PER is low or high. Stocks with high PER does not necessarily bad stocks.

CONCLUSION: From the rankings presented, stocks were screened using the fundamental analysis.
Fundamental analysis is being used by investors who tend to be more long term on their portfolio and employs the Warren Buffett kind of strategy, value investing.
Fundamental analysis answers the what of stock investing as opposed to technical analysis which answers the question when to buy and sell stocks.
The selection is not guaranteed to give the highest ROI, but can be assured that these are the most resilent stocks or companies in the market.
By resilience, it meant that these stocks have proven , through the cycles of bull and bear, that they are the last to go down on bad times and the first to go up on good times. quick to rebound! Putting it differently, slow to go down but
Ultimately, a good investment manager or a wise investor should know who is who in the Philippine Stock Market to be able to have a clear guidance in setting up a good portfolio. This line up should not only give the potential maximum profits but most importantly, protection. a portfolio which will also provide the utmost capital
What a companys stock sell for today, tomorrow, next week or next year does not matter. What counts is how the company does over a 5 to 10 year period. It has nothing to do with charts or numbers. It has to do with business and management. Warren Buffet, Berkshire Hathaway
Sources: Bloomberg, PSE website, own computation

DISCLAIMER: This Research is for educational purposes only and is not intended as an offer to sell or solicitation to buy securities. The writers accepts no liability whatsoever for any direct or consequential loss arising from any use of this publication. The information contained in this publication is based on sources we believed to be reliable.

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WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

(WHY WILL YOU INVEST YOUR MONEY IN THEIR COMPANY?)

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

Indicators. the PSE use

PSEi, which is the main index;

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

PSE Organizational Chart

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

FOREIGN BROKERS 11.42 10.94 8.87 6.78 4.92 4.82

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

18 L 19 F 20 L TOTAL MARKET VALUE

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

total equity is divided by the of outstanding shares,

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

METRO BANK & TR

FIRST PHILIP HLD

BANCO DE ORO UNI

Eduardo M. cojuanco Jr.Chairman,Ceo Ramon S. AngPresident,Coo

James L. Chairman, Lance GokongweiPresident ,Coo

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

improved valuation will always trigger a

Increase price lead will

higher market the

Who are the biggest listed companies by Market Capitalization

Market capitalization is the measure of corporate size.

Majority of these companies are also in the list of

biggest companies by equity with even bigger amounts of market capitalization.

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

Who gives the highest dividend yield?

The diagram below simply explains the dividend yield ranking.

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

to be able to buy at near

reasoble price or sell maximum price at the time.

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

Sources: Bloomberg, PSE website, own computation

WHO IS WHO IN THE PHILIPPINE STOCK MARKET?

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